Reliance wants price of $8.3 mmBtu for gas supply to fertilizer firms

Reliance IndustriesReliance Industries Ltd (RIL) has said that it is seeking a price of $8.3 per million metric British thermal unit (mmBtu) rate for gas supply to fertiliser companies.

The company had agreed to supply gas to fertiliser companies at 4.2 mmBtu rate after a meeting in the previous week even as it concluded its agreement with firms on 31 March. The company officials have indicated that another round of negotiations are expected to follow with the fertilizer firms on the matter.

The Election Commission had ordered the company to delay the increase of domestic gas price to $8.3 per mmBtu till the code of conduct is in force. The increase in gas price was expected to come into force on 1 April, 2014. RIL has said that the gas price of $ 4.205 per mmBtu was valid only till March 31.

The company wrote, "By a notification dated January 10, 2014, published on the Gazette of India on January 17, 2014, the Government of India has notified the (new) gas price formula. Clearly, with effect from April 1, 2014, a revised price is applicable to all gas supplied by us and accepted by you."

Rakesh Kapur, joint managing director and chief financial officer of the Indian farmers Fertilisers Cooperative said that the company has not agreed to retain the price and is now seeking a letter of credit for differential amount.