Aug. 27: The Ambani brothers continue to fire off letters ahead of a crucial Supreme Court hearing on the gas dispute scheduled next Tuesday.

Anil Ambani’s RNRL wrote to petroleum secretary R.S. Pandey that users of KG-D6 gas were paying a high price because of an artificial scarcity created by Reliance Industries even as the Mukesh Ambani-run entity blasted NTPC Ltd for prevaricating on the terms of the gas-supply contract reached in 2004.

RNRL’s group president A.N. Sethuraman said in his letter to Pandey that the international price of gas had slumped 80 per cent between July 2008 and August 2009, but the KG gas price had risen 20 per cent in rupee terms. Such a situation has arisen because of the relative strength of the dollar vis-a-vis the rupee.

“This has led to an entirely unjustified annual increase, at peak production, of over Rs 3,700 crore for gas consumers,” Sethuraman said. ADAG has estimated that this number could amount to Rs 50,000 crore over the expected lifetime of the KG-D6 basin.

It called for a review of the pricing policy once again not just on account of the denomination in foreign currency but also because RIL’s gas prices were inelastic at a time when there were sharp movements in global prices.

RIL director P.M.S. Prasad also wrote a letter to Pandey in which he said NTPC was misleading the government by claiming that it wasn’t aware that the KG gas price quoted in response to its global bid had to be approved by the Centre.

Prasad said, “NTPC was aware of the requirement of gas price approval under the production sharing contract and had insisted upon and agreed to its inclusion as a condition precedent to the gas supply agreement.”

The clarification from RIL came after reports said NTPC chief R.S. Sharma had written to the government to indicate that “RIL did not convey to NTPC that the price quoted by RIL in the international competitive bidding was subject to approval of the government under the PSC.”