ANOTHER SCAM IN OFFING

2010 was a year of scams. We had the CWG (Commonwealth Games) scam. The dust was just starting to settle and the country was rocked by the 2G scam. Well hold your breath, now there is another scam and it is even bigger than the 2G plus CWG scams put together. This time the sector hit with a scam is the LNG (liquefied natural gas) sector. And the person in question is the Petroleum Secretary (for how much he sold the nation?Keep guessing).

People are talking about the LNG scam. This scam is related to an agreement that the government owned Petronet LNG had with Qatar based RasGas for the supply of LNG. As per this agreement RasGas had offered to sell LNG to Petronet for US$ 2.53 per mmBtu (million British thermal units) at a crude oil price of US$ 20 per barrel. Further as per the agreement, LNG price would rise/fall by US$ 0.02 per mmBtu for every dollar movement in crude price. Therefore as per this agreement, Petronet would pay US$ 4.13 per mmBtu of gas when oil prices touched US$ 100 per barrel. The deal was valid for 25 years. This was in 1999. But come 2003, things changed.

In 2003, RasGas decided to revise the contract and Petronet agreed. This time it agreed to pay the earlier agreed amount from 2004 to 2009. After that the price of gas would be directly linked to the crude prices. This meant that the price would go up by US$ 1 per mmBtu for 5 years from 2009 and then from 2014, LNG would be priced at US$ 12.66 per mmBtu. If this new contract had not been accepted the price of LNG would have been US$ 3.04 per mmBtu for 25 years.

This revised pricing would mean that the Indian consumers would pay an additional amount of US$ 3.7 bn a year. This translates to a total of US$ 55.5 bn over 15 years. So why did Petronet agree to this? Being fully aware of its impact on the Indian consumers it went ahead and agreed to this price. Now the Parliamentary Standing Committee has woken up to the scam and has stated that state firms like Petronet should be brought under the purview of CAG audit. But the thing is why didn't anyone realize this earlier? After all, the agreement was entered into in 2003. And it is now 2011.

In a democracy, the government is a representative of its people. But when it acts in its own interests, the hopes and faith of the people are shattered. And unfortunately for India, this has now become a recurring incident. It is high time that the people woke up and realized that the Govt is supposed to work in the interest of its people. Otherwise we just might see an Arab spring occurring in India as well.

Do you think India would ever become a scam free nation? I have my doubts,unless we develop our National Character.