Reliance is currently selling gas at USD 4.2/mmbtu; the Cabinet's decision to allow a higher gas price had to be deferred because of the Election Commission's model code of conduct.
Reliance Industries , along with BP and Niko, have sent an arbitration notice to the government seeking higher gas prices under the 'Domestic Natural Gas Pricing Guideline 2014' notified in January this year.
Reliance is currently selling gas at USD 4.2/mmbtu; the Cabinet's decision to allow doubling of gas price had to be deferred because of the Election Commission's model code of conduct.
"The continuing delay on part of the Government of India in notifying the price in accordance with the approved formula for the gas to be sold has left the Parties with no other option but to pursue this course of action," said the Reliance Industries press release.
(RIL's arbitration notice to govt: Experts analyse implications)
"Without this clarity, the Parties are unable to sanction planned investments of close to $4 billion this year. In addition, this will also delay the ability of the Parties to appraise and develop other significant discoveries made last year," the released.
In an interview to CNBC-TV18, Reliance's lawyer Harish Salve said that his client had to protect its commercial interests and could not wait till the next government took charge.
"God knows when the government will be formed, who the government will be, what they will do, they will take their own time," he said.
He said he was hopeful that the government would agree to a middle-ground solution.
The current government has barely 10 more days of office.
Salve said his client was forced to take this extreme step since repeated letters to the government has not yielded any results. He said the company was now in a litigation mode after having exhausted all means for an amicable settlement. There would be no more talks with the government, and the ball was now in the government's court, said Salve.
He said he was meeting RIL representatives next week to decide on the next step.
Salve refused to comment on what price RIL would supply gas to user industries from Monday.
Next page: Transcript of Harish Salve's interview on CNBC-TV18
Reliance stock price
On May 09, 2014, Reliance Industries closed at Rs 997.35, up Rs 37.70, or 3.93 percent. The 52-week high of the share was Rs 999.00 and the 52-week low was Rs 765.00.
The company's trailing 12-month (TTM) EPS was at Rs 68.01 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 14.66. The latest book value of the company is Rs 556.88 per share. At current value, the price-to-book value of the company is 1.79.
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