Oil & Natural Gas minister Murli Deora is a true Mumbaikar: he is known for having close relations with politicians across the political spectrum. He had tough time a few months back when Samajwadi Party chief Mulayam Singh Yadav and the mercurial former SP general secretary Amar Singh, targeted him. He was alleged to have helped Mukesh Ambani make a staggering profit of Rs 50,000 crore.

In 1977 Deora was elected mayor of Mumbai with Shiv Sena's support only exemplifying his political acceptability across party lines. Our correspondent quizzed him recently on various issues confronting him and his ministry. Excerpts:

IE: Your ministry has been making news recently on the auto fuel policy supplying cleaner fuel. Please tell us something more…
Deora: The Auto Fuel Policy of 2003 requires Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation to sell petrol and diesel, meeting the stringent Euro-IV specifications, in 13 major cities and to Euro-III specifications across India. As part of fulfilling that commitment, we have opened HPCL's Mumbai refinery Euro-IV project on 17 January 2010. The total cost of the upgradation project is Rs. 1731 crore. This fulfills the commitment towards supplying cleaner fuel as envisaged in the Auto Fuel Policy.

IE: You are also working on finding ways to compensate state-run oil companies for their losses on fuel sales due to administered prices of LPG, kerosene, diesel, petrol…
Deora: These are matters of policy decisions and details. I can only say that we have taken up the matter at the highest level with Prime Minister Dr Manmohan Singh. There are various options before us. We are looking into all aspects including talking to the finance ministry.

IE: We hear of some differences with the finance ministry on petroleum ministry's proposal for issuing bonds to the oil companies?
Deora: Sorry, I cannot brief you anything more on this.

IE: People were largely surprised when you were identified with one particular company, Reliance Industries Ltd., for allegedly helping it make a high profit at the cost of the state exchequer.
Deora: I really don't know why this has happened. I have absolutely nothing against Anil Ambani. I am also equally surprised with the development if not more than you.

IE: What about the allegation that you have favoured Mukesh Ambani?
Deora: We have nothing to do with the private dispute between the two brothers or other industrial houses. I have made it clear in my statement in parliament that we will make all endeavours to protect government's legal rights to regulate the utilization of gas. This is our constitutional obligation. As the minister in-charge I am duty-bound. This is the collective policy stance of the Union cabinet as well.

IE: What has been the government stand in the court? There were certain allegations on this score as well?
Deora: The government has made the request to the court to lift the injunction on creation of third party interests by Reliance Industries Ltd. (RIL). This will enable RIL supply gas to customers. The government's request has been accepted and this is why gas production has started at Reliance and gas supply is being made to priority sectors as per the government norms. We have also informed the parliament that since the gas production started since April 2010, about 4000 MW of additional power is being generated.

IE: But Anil Ambani has raised the bogey of discrimination against NTPC. This figured in parliament and Anil Ambani has also written to power minister Sushil Kumar Shinde on this?
Deora: It's all bogus. The NTPC plant in Dadri has been allocated 0.45 mmscmd of gas as a special case. Out of 18 mmscmd for power sector, 2.67 mmscmd gas has been allocated to NTPC plants. Another 2.7 mmscmd has been allocated to another project where NTPC has 28 per cent stake.

IE: But assets in power sector remain idle?
Deora: May be, there is some truth in this. But look here, this has not happened in a day. The present cost of assets, which are lying idle or under-utilized as you are saying in the power sector due to non-availability of gas prior to the commencement of KG D-6 production, was around Rs. 36,000 crore. You must note 3 mmscmd gas has been allotted to LPG sector. I have said categorically the final order dated 15 June 2009 of the division bench of the Hon'ble Bombay High Court has implications on the government's rights to formulate and implement the gas utilization policy under the production sharing contract.

IE: But, the controversy is all about allocation of gas from KGD-6 gas field. You seemed to be avoiding an answer on this…
Deora: You are referring to what Mulayam Singhji has raised both inside and outside the parliament. I have explained earlier also, but I will repeat: according to the Production Sharing Contract (PSC) signed in 2000 by the government, gas to be produced from KG D-6 fields is to be utilized in accordance with the gas utilization policy to be approved by the government.
The government had subsequently decided at the level of an Empowered Group of Ministers (EGoM) on the Gas Utilization Policy. Under this, out of the initial production, 15 mmscmd will go to existing urea plants, 18 mmscmd to existing power plants, 3 mmscmd to existing LPG plants and remaining 5 mmscmd for City Gas Distribution projects. Gas production in this well began on 1 April 2009. Within a year, it is expected to go up to 80 mmscmd. As far as power sector is concerned, 18 mmscmd has been allocated to various existing plants to improve their plant load factor.

IE: Mulayam Singh and his party are particularly perturbed over supplies to the Dadri power plant. Samajwadi MPs stormed parliament repeatedly charging discrimination against UP?
Deora: As far as Anil Ambani-run RNRL's Dadri power plant is concerned, the case was considered by the group of ministers. This plant is neither installed nor functional. I have also said in parliament that there has been no discrimination against Uttar Pradesh. Out of a total of 15 existing gas-based urea plants in the country, five are in Uttar Pradesh, namely, Aonla, Phulpur, Shahjahanpur, Babrala and Jagdishpur. All of them have been given gas. Gas, as you know, is a scarce commodity and we would like to give gas to most plants, but the priority will be to supply gas to existing plants. No gas has been allocated to any plant, which is not existing nor functional.