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Oil ministry had restored gas supply to Baalu family firm, withdrew order last week

Oil ministry had restored gas supply to Baalu family firm, withdrew order last week

Author: Amitav Ranjan
Publication: The Indian Express
Date: May 4, 2008
URL: http://www.indianexpress.com/story/305066.html

Introduction: When the issue rocked Parliament, Ministry wrote to Gail to withdraw its earlier letter clearing supply to KICC, owned by Baalu's son

The Petroleum Ministry had restored gas supply in January to King India Chemicals Corp-one of the two firms for which Union Shipping and Surface Transport Minister T R Baalu was pulling strings-but it quietly withdrew the order last Monday after the Opposition badgered the government on misuse of office.

While a din was being raised for the third consecutive day in Parliament on April 28, Under Secretary K K Sharma of the Petroleum Ministry wrote to GAIL (India) Ltd's CMD that the letter dated January 4 asking GAIL to supply natural gas to KICC "is hereby withdrawn".

Sharma quoted a February 19 order by Madras High Court on writ appeals which set aside the previous single-judge order of reinstating the supply to KICC. As per the new order, both KICC and Kings India Power Corp would have to submit afresh their plea for gas allocation. "As per the directions of the Court, the fresh representations from the petitions would be considered separately," wrote Sharma.

The ministry would "examine the representation on its own merits and pass appropriate orders in accordance with the law," he adds.

Interestingly, the ministry's letter reinstating the gas supply and last Monday's letter rescinding it were issued without consulting state-run gas transporting and marketing company GAIL even though it was asked on April 23 to submit a report within a week.

Also, the letters do not find any mention in Petroleum Minister Murli Deora's support to Road Transport & Highways Minister Baalu in Parliament on April 30. Deora talked of his meeting with Baalu and the "discussion held in Prime Minister's Office to ascertain the status" of the cancellation by the previous NDA government in January 2004.

Deora claimed that the PMO had not issued any order or any instructions to help the company and "not a single cubic metre gas has been supplied to the companies". Baalu was pushing the requests of his sons' firms -KICC's for 10,000 standard cubic metres of gas per day and KIPC's for allocation of 0.45 million SCMD.

Their demand was for subsidised gas sold at administered price of $1.96 per million British thermal units whereas the market price is anywhere between $6 and $16 per mBtu


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