RIL-RNRL row: Govt to step in, mulls EGoM, also RNRL invites RIL for talks on gas supply.

It may be the biggest legal spat between the high profile Ambani brothers in recent times, and as Mukesh Ambani's firm opposes a directive to sell gas to Reliance Natural Resources, owned by the younger sibling, at a discounted price, it's the government of India that is planning to step in to avoid an all out war.
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The government could be looking at a collective decision-making group on the issue. It all started with the petroleum ministry coming in the open and saying that gas being a national resource, the government will look at intervening in the matter.

Now, the battle has moved to the next stage because the Prime Minister's Office may set up an empowered group of ministers (EGoM) to look into the gas-price war between the two brother's firms. The group will lay the rules for the extent of government's intervention in the controversy and its role in quelling further problems.

In short, the matter will not be left to the oil ministry alone. According to sources, the government feels that gas being a national resource and source of revenue, any decisions should be collective ones. Meanwhile, the writing on the wall is clear. This is one of the biggest corporate wars India has seen in recent times and the government obviously does not want to be a mere spectator. The immediate task before the proposed EGoM might be to find a way out, without breaching the court order asking RIL to sell gas at 40 per cent cheaper to RNRL.


Reliance Natural Resources Ltd (RNRL), an Anil Ambani Group company, has written to Reliance Industries Ltd (RIL) for a meeting of executives of the two companies to find a way forward in the KG basin gas sharing issue. RNRL is said to have written a letter to RIL in view of the Bombay High Court order, which asked both companies to arrive at a settlement over outstanding issues.

-JK, Lead Analyst, SLT
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