GANDHINAGAR: A day after Securities and Exchange Board of India (Sebi) cleared the initial public offering bid of state-owned blue chip company Gujarat State Petroleum Corporation (GSPC), doubts are being raised whether gas from the company’s block in Krishna-Godavari (KG) basin will flow into Gujarat.

The Supreme Court verdict on gas allocation in the Ambani brothers dispute may have serious implications on GSPC. The reason: the judgment goes far beyond the dispute of allocating Reliance’s KG basin gas to Anil Ambani’s company at cheaper rate. While the decision may not have any impact on GSPC’s profitability, it has certainly put a question mark on Chief Minister Narendra Modi‘s dream of making Gujarat the gas capital of India. 

Senior state officials studying the judgment say, preliminary examination suggests the apex court judgment has four-fold implications for Gujarat: First of all, the GSPC is merely a contractor exploring the gas for the government of India under the new exploration licensing policy (NELP) at KG basin. More still, gas is a national asset and does not belong to a particular state or company and that GoI has the sole right to decide on which state gets how muchgas. And finally, a state government or a company has no right to decide on the price at which the gas should be sold. “It is the prerogative of the Union government to decide on the matter,” a senior official said.

The Gujarat government wanted GSPC to link up with Reliance pipeline to bring KG basin gas from Kakinada in Andhra Pradesh to Hazira in Gujarat. Beyond that, GSPC would use its own pipeline network, already fully developed across the state. Plans were made to turn Gujarat into the gas capital of India by starting production and supply of KG basin gas starting with December 2011.


Source: TimesofIndia