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Stocks of Reliance Industries Ltd may continue to remain range- bound, with negative bias, as the allegations of the company overstating costs for its KG-D6 block resurfaced and noise for a probe by the Comptroller and Auditor General is gathering pace. According to reports that came after market hours, the country's top auditor has pulled up the oil ministry for agreeing to conditions set by Reliance Industries over the proposed KG-D6 audit. Further development on this front will be eyed next week and if the oil ministry agrees to a comprehensive audit of KG-D6 by the CAG. CAG has written to the oil ministry saying that it should have been consulted before the ministry made commitments to the company on the audit of its once-promising block.
The company was initially opposing the audit on grounds that it is a private sector company but had later agreed to a cost audit after the oil ministry under S. Jaipal Reddy said that it will not approve the company's development plans for the block unless the audit is allowed. However, Reddy was replaced by Veerappa Moily as oil minister earlier this week, leading to allegations that the government succumbed to pressure from Reliance Industries.
Anti-corruption crusader Arvind Kejriwal attacked the government this week suggesting that Reliance Industries was deliberately keeping the output from the block low to force the government to hike prices. The state-owned oil marketing companies will track crude oil prices and rupee-dollar exchange rates but the trend is seen broadly positive. Crude oil prices have remained stable around $107 a barrel over the last week while the rupee too is holding below 54 for a dollar.
