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Reliance seeks surety

Price poser

New Delhi, April 9: Reliance Industries has asked fertiliser companies to provide security of payment based on the Rangarajan formula that was to be effective from this month, a week after agreeing to supply gas without disruption.

Industry sources said RIL had agreed to supply gas uninterrupted even as discussions on the new price remained inconclusive. The company now wants fertiliser companies to provide security for payment for the difference between the old and new rates. RIL believes the gas formula has been notified and the only thing left is the exact price.

However, the fertiliser association has made it clear that it would not make the payment unless the government comes out with a new price.

Fertiliser secretary Shaktikanta Das had said last week that RIL had agreed to supply natural gas to fertiliser companies at $4.2 per million British thermal unit till a new agreement was reached between RIL and 16 fertiliser companies that buy gas from the company.

Das did not elaborate on the duration or other terms of the new contracts between RIL and the fertiliser companies.

In a strongly worded letter, dated April 8, RIL has contested this interim “agreement”, saying “your description of what transpired at the meetings held in the ministry of petroleum and natural gas and in the department of fertilisers, respectively, is not accurate. We deny that the sellers agreed to the terms as suggested by you in your letter dated April 3.”

RIL had agreed to continue supplies in the interim. But there was a dispute over the rate at which consumers should provide payment guarantees — the expired price or $8.34, which would have been applicable from April 1 had the Election Commission not postponed the implementation of the new rates.

 
 
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