Ministry accepts in principle RIL formula to calculate bank guarantees, talks to be held today Unfazed by Delhi Chief Minister Arvind Kejriwal’s move to register a corruption case against Oil Minister Veerappa Moily and Reliance Industries Chairman Mukesh Ambani for their alleged collusion in doubling the price of natural gas, the Central government is taking steps to implement the new rates as scheduled from April 1. The oil ministry will meet RIL executives on Thursday to finalise details of bank guarantees that the company will pay, which is a precondition for Reliance to charge the new gas rates according to the Rangarajan formula. “In principle, we have accepted Reliance’s formula to calculate bank guarantees, which will be in two parts. The first bank guarantee will be for the current shortfall that will be calculated on the basis of past three months’ production data. The second one would be of cumulative value, where amount for the current period would be added after every quarter,” a senior oil ministry official told ET. The oil ministry has called for a meeting with RIL executives to iron out “some minor differences” over the mechanism to calculate the quantum of the two bank guarantees, government and industry officials said requesting anonymity. The oil ministry has formed a six-member committee chaired by its deputy secretary, Nalin Srivastava to sort out these minor issues so that the proposal can be sent to other government departments for inter-ministerial consultation, officials said. The committee has equal representations from the oil ministry and the directorate general of hydrocarbons, they added. ET Now quoted another senior oil ministry official who said that “the final guidelines for the bank guarantee are in place, we will be seeking finance and law ministry opinions shortly”. “RIL will have to submit a bank guarantee on a quarterly basis, depending on estimated output from D1, D3 fields. Based on current projections RIL's share of the guarantee will be between $60-70 million every quarter,” said the official requesting anonymity. The Supreme Court has said that higher gas prices for RIL will only be applicable after judicial review of the case, the next hearing of which is scheduled on March 6. Meanwhile, Delhi CM Arvind kejriwal filed an FIR on Wednesday against the government’s decision to hike gas prices, naming both oil minister Veerappa Moily and RIL chief Mukesh Ambani. Fixing Sureties • The first bank guarantee will be for the current shortfall that will be calculated on the basis of past three months’ production data • The second one would be of cumulative value, where amount for the current period would be added after every quarter • Based on current projections RIL's share of the guarantee will be between $60m & $70 m per quarter