ADAG co fails to pay Rs 12 lakh: RIL may shut off gas

They may be the two richest Indians, but Mukesh Ambani-led RIL may shut gas supply by this weekend to a power plant of younger brother Anil's group for 'default' on a payment of a paltry amount of Rs 12 lakh (Rs 1.2 million).

The pipes may go dry if Anil Ambani group's Reliance Infra does not resolve the contentious issue of marketing margin on gas in a day or two, sources close to RIL said.

Sources said over Rs 12 lakh due in marketing margin for the first fortnight of September was recovered by RIL by invoking the Letter of Credits (or bank guarantee) R-Infra had created before commencement of supplies of RIL's KG-D6 fields.

Spokespersons of both the groups declined to comment on encashment of LCs. An RIL spokesperson also declined to comment as to when the gas supply would be stopped. The 220 MW Samalkot power plant in Andhra Pradesh had since May paid about Rs 25 lakh (Rs 2.5 million) per month in marketing margin on the fuel it buys from RIL but it has suddenly become contentious issue.

So far, it has paid about Rs 1.25 crore (Rs 12.5 million) to RIL as marketing margin. R-Infra this month stated that the $0.135 per million British thermal unit marketing margin were 'unauthorised and illegal' and refused to pay them, leading to RIL on September 22 sending a notice of suspension of supplies.

The same marketing margin is being paid by over 40 other customers of KG-D6 gas. Even NTPC signed a deal on Wednesday with RIL, wherein it agreed to pay the margin.

Image: RIL chief Mukesh Ambani