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It appears that the Centre is looking for a pretext to avoid implementing the decision to grant a higher price for gas from the KG-D6 block operated by Reliance Industries Ltd (RIL). What else could explain the delay in finalising a mechanism for the bank guarantee that RIL must furnish for being eligible to charge more for its gas from April 1 Whether the bank guarantee - to be encashed in the event of RIL being found guilty of deliberately suppressing production -  should be submitted by the company alone or also its foreign joint venture partners (since they are not parties to the arbitration filed by the former) is a matter of detail. In any case, this is an issue that should have been resolved by now, considering that the new methodology for pricing of domestically-produced gas was notified nearly two months ago.

There is a logic for holding all three partners in KG-D6 - RIL, BP and Niko Resources - to a bank guarantee, as they all benefit from a higher price. But even if one holds another view, it is hardly the kind of issue that should be allowed to cast a fog of uncertainty over RIL’s gas supply/sale agreements with buyers. Given that the existing contracts are set to expire in less than a month’s time, certainty about pricing is something that consumers of KG-D6 gas - leave alone RIL - are entitled to. By failing to settle the bank guarantee issue and also finalise the arbitration mechanism to prove its suspicion that RIL is hoarding gas, the Centre is dragging its feet over a matter that could acquire political overtones ahead of the Lok Sabha elections. This is ironic, since hiking gas prices would principally benefit the state-owned oil companies, which account for a 60 per cent share of domestic production.

If the Centre is to blame for procrastination, RIL is culpable for a string of mistakes made by it ever since winning the KG-D6 block. The production sharing contract signed by it with the Centre had given the company the freedom to sell gas at a market price. But it muddied the waters - thanks to a combination of expediency and shortsightedness - by acceding all too readily to a regime where the price got administered. It began with bidding at a certain price for supplying gas to a couple of NTPC projects, being held to that same price under a family agreement, and then acceding to a higher almost-doubled government-administered price that it found more attractive. One may be tempted to dismiss this by saying RIL’s chickens have come home to roost, but the present impasse has serious economic consequences and must be broken quickly. Yes, by all means penalise the company heavily if it is found guilty of hoarding gas, but delay is hardly the alternative to decision-making.

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