Why it was in news yesterday?(15/06/09)
RIL To Earn Less On 1/3rd Of Its Gas Production
THE Bombay High Court on Monday asked Reliance Industries (RIL) to sell gas at a sharply reduced price to an Anil Ambani group firm, causing some uncertainty in Indias nascent natural gas industry and delivering a sharp blow to the valuations of RIL, the countrys biggest private sector firm by market value.
In a move that is likely to have many significant and unintended consequences, the court asked Mukesh Ambanicontrolled RIL to sell gas at $2.34 per mmBtu to Reliance Natural Resources (RNRL), which is owned by the younger Ambani. This price is 44.2% lower than the $4.2 per mmBtu that RIL has agreed to charge power and fertiliser firms under recently-signed agreements, and which is based on a government-approved formula. RIL wanted the court to uphold the government-approved price, but the court sanctified the lower price of $2.34 per mmBtu, which is stipulated in an agreement signed between Mukesh and Anil at ...more