The government has slapped an additional penalty of $579 million on Reliance Industries for not producing the gas as per the given commitment to the Central government in KG-D6 block. Oil minister Dharmendra Pradhan had provided this information as an answer to the question in parliament.
With this, the total penalty on RIL for missing the target in four fiscal years beginning April 1, 2010 now stands at a cumulative $2.376 billion, Earlier to this the RIL wanted a price increase on the gas price as per the international standards. But UPA II government has refused to do the same and asked for the clarification. There is an information as roomer that Mr Jaipal Reddy was cabinet minister of oil in UPA II moved out of the profile due to this issue. The penalty is in the form of disallowing costs incurred. The production sharing contract (PSC) allows RIL and its partners BP Plc and Niko Resources to deduct all capital and operating expenses from the sale of gas before sharing profit with the government.
Mukesh Ambani quite unhappy with Modi team response on this issue as he was expected Modi will provide a solution for this with an probable price increase. Sources close to him says that RIL thinking to drag this issue to court.
With this, the total penalty on RIL for missing the target in four fiscal years beginning April 1, 2010 now stands at a cumulative $2.376 billion, Earlier to this the RIL wanted a price increase on the gas price as per the international standards. But UPA II government has refused to do the same and asked for the clarification. There is an information as roomer that Mr Jaipal Reddy was cabinet minister of oil in UPA II moved out of the profile due to this issue. The penalty is in the form of disallowing costs incurred. The production sharing contract (PSC) allows RIL and its partners BP Plc and Niko Resources to deduct all capital and operating expenses from the sale of gas before sharing profit with the government.
Mukesh Ambani quite unhappy with Modi team response on this issue as he was expected Modi will provide a solution for this with an probable price increase. Sources close to him says that RIL thinking to drag this issue to court.