Chalasani causes Rangarajan ripple

Vol 16, PW 8 (01 Nov 12) News in Brief

Reliance Power boss JP Chalasani caused a stir with a highly unorthodox suggestion during his hour-long presentation to the Rangarajan panel on October 19.

PETROWATCH learns Chalasani startled sitting members by suggesting that domestic gas (Read: D6 gas) supplied to the subsidised power and fertiliser sectors should be sold in line with the attractive pricing formula that governs the 25-year SPA signed between RasGas and Petronet-LNG, minus $1.75/mmbtu for liquefaction and shipping. For non-subsidised sectors, said Chalasani, producers should be allowed to sell at ‘arms-length’ or free-market prices.

Why this differential pricing, asked panel chairman C. Rangarajan Because nearly three quarters of domestic gas is presently sold to the power and fertiliser sectors and the rest to the other sectors, Chalasani is believed to have replied.

PMS Prasad of Reliance, and Sashi Mukundan of BP, whose separate presentations followed, were apparently dismissive of Chalasani’s suggestions, when asked for their comments.