Communist Party of India (CPI) has demanded the Union government to revisit the Rangarajan price formula of natural gas produced by Reliance Industries (RIL) in KG-D6 block as the production cost for RIL is just Rs $2.74 a million Britiesh Thermal unit (mBtu). CPI added that the Rangarajan pricing formula of $8.4 an mBtu would give RIL a windfall gain. The Rangarajan formula is applicable from April 2014.
CPI said the Union Petroleum Ministry figures had admitted that after computing from the financial statement of RIL in 2011-12 on projected level of production, the cost of production, including levies, worked out to $2.74 an mBtu. If the cost of production is only $2.74, how has Rangarajan come to the conclusion that it should be $8.4 per unit to be given to the contractor? Evidently, it is a case of lack of due diligence,” the CPI said in a letter to the Prime Minister Manmohan Singh.
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