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Rebutting the AAP charge that Mukesh Ambani runs UPA government, Finance Minister P. Chidambaram today said huge penalties have been imposed on Reliance Industries for producing less than committed gas and bank guarantees will be taken before allowing any price hike.
P. Chidambaram, who was part of the decision to allow all domestic natural gas producers including Reliance Industries to almost double the natural gas prices from April, called the FIR registered by the AAP government against Oil Minister M Veerappa Moily and others for raising gas prices as "laughable".
"These are throwaway lines which do not deserve to be replied to," he said in an interview when asked about charge levied by Arvind Kejriwal and his party that Mukesh Ambani ran the government.
"The Petroleum Ministry has imposed a huge penalty on RIL. The Petroleum Ministry has required them to furnish a bank guarantee for the undelivered quantity of gas pending the issue of price rise. So, how can anyone say that this government is run by business man," he said.
The government has imposed about USD 1.8 billion penalty on RIL for natural gas output from its main fields in Krishna Godavari basin KG-D6 block falling short of the targets during the last three years.
On top of this, the company has been asked to give bank guarantees equal to the incremental price it will get from April 1. This bank guarantee will be encashed if it is proved that RIL's reasoning of water and sand ingress coupled with sudden drop in reservoir pressure leading to KG-D6 output drop are proved wrong.
P. Chidambaram said the government will not go back on its decision to raise gas prices for both public sector and private producers from April 1.
"Mr Moily has said that the decision of Cabinet will be given effect on April 1. That's the government's position and I think Mr Moily is right," he said.
The new rates, which are likely to be at USD 8-8.4 against the current price of USD 4.2 per million British thermal unit, are based on the recommendations of a committee that was appointed by Prime Minister Manmohan Singh at the request of Moily's predecessor, S Jaipal Reddy.
Days before he quit as Delhi Chief Minister, Arvind Kejriwal ordered filing of a police complaint against Moily, RIL and its Chairman Mukesh Ambani for creating an artificial shortage of gas in the country and raising prices.
"Now, what is the