A state-level public convention was organised on April 16 at Samhita Convention Hall in Rajamahendravaram, Andhra Pradesh, under the aegis of the KG Basin Gas and Oil Sadhana Samiti. The event focused on the demand that 50 per cent of the gas and oil extracted from the KG Basin be allocated to meet the needs of the state’s people.

Reliance is extensively exploiting the oil and natural gas reserves located in the Krishna-Godavari (KG) Basin. However, the state is not receiving its rightful share of these resources, resulting in a growing gas shortage. This situation has been further aggravated by the ongoing geopolitical tensions involving the United States, Israel, and Iran. Even the “profit gas” generated from these operations is not reaching the state, leaving it effectively empty-handed.

In this context, the demand to allocate at least 50 per cent of the gas extracted from the KG Basin to the state is gaining significant momentum. The KG Basin is the largest hub of oil and gas production in the country. Despite petroleum products worth hundreds of thousands of crores being extracted from this region, the state derives little to no benefit. Due to the policies of both the central and state governments, natural resources that rightfully belong to the people are being appropriated by private corporate entities such as Reliance.

Ironically, although gas is produced within the region, citizens are forced to purchase cooking gas cylinders at exorbitant prices, often exceeding ₹1,000. Furthermore, the state is not receiving its legally entitled share of “profit gas.” This inequity lies at the heart of the petro-related hardships currently faced by the people. Against this backdrop, the CPI(M) and various mass organisations are preparing to launch a struggle to secure the state’s rightful share of gas resources.

Valuable Wealth Belongs to the State

The KG Basin is estimated to hold around 698 million metric tonne of oil and comparable volumes of natural gas reserves. Crude oil production in the region is approximately 19,190 barrels per day, while natural gas production stands at about 9.8 MMSCMD. The D6 Block — one of the world’s largest gas reserves — is located offshore near Kakinada, covering an area of 7,645 square kilometres. Reliance Industries holds a 90 per cent stake in this block, with the remaining 10 per cent owned by the Canadian firm Niko Resources Limited.

Currently, this field produces between 27 and 30 MMSCMD of gas. To date, nearly 2.8 trillion cubic metres of natural gas have been extracted. Instead of meeting the needs of the state, much of this gas is being diverted to states such as Maharashtra and Gujarat, depriving the region of its rightful share.

Where is the ‘Profit Gas’ Share?

When petroleum and natural gas reserves are discovered, the operating company is obligated to supply a portion of the output to the central government free of cost — this is known as “profit gas.” Of this, 50 per cent is expected to be allocated to the respective states. Ideally, the remaining share retained by the Centre should be supplied at reasonable rates to the region where the resources were discovered, at least at prices comparable to those of ONGC.

However, instead of receiving gas, the Centre is opting to take its share in monetary terms. As per the recommendations of the 12th Finance Commission, the state is entitled to a 50 per cent share of the “free gas.” Yet, the Centre argues that since the reserves are located offshore, the state has no claim over them. This stance has resulted in a serious injustice. Unfortunately, the state’s political leadership has remained largely silent on this issue.

Even if just 25 per cent of this gas were allocated to the state, it could be used to generate free electricity for the agricultural sector, potentially meeting the long-term power needs of farmers, especially in dry regions.

Immense Opportunities for Gas-Based Industries

In Gujarat, companies such as SR Steel are successfully producing steel using gas as a primary energy source. If the state were to receive its rightful share of gas, similar industries could be established locally. This would also create opportunities to significantly expand the capacity of the Visakhapatnam Steel Plant.

So far, gas reserves of around 200 MMSCMD have been identified in the KG Basin. Each MMSCMD of gas has the potential to attract industrial investments worth approximately ₹1,000 crore. Even utilising half of these resources could bring in investments worth hundreds of thousands of crores. The CPI(M) has been consistently organising struggles to secure the state’s rightful share. 

Gas Must Be Allocated for State Needs

Vast reserves of oil and natural gas are being extracted from the KG Basin, yet the state’s own needs are being neglected. Reliance is accused of siphoning off resources, including gas worth over ₹10,000 crore from Block D5 in addition to Block D6, while authorities remain silent. Gas extracted from this region is being transported to Gujarat and even exported to foreign markets, generating enormous profits. At least 50 per cent of the gas produced in the KG Basin must first be allocated to meet the state’s requirements before being diverted elsewhere.

Convention demands

Several speakers at the convention asserted that one of the largest instances of resource plunder in the country is taking place in the KG Basin. They demanded that the state government pass a resolution in the Assembly to secure a 50 per cent share of the basin’s resources, and pledged to intensify the struggle if necessary. The speakers noted that since 2002, Reliance Industries has been extracting and selling gas and oil from the KG Basin, accumulating wealth worth thousands of crores, while the local population continues to face environmental damage and socio-economic hardships. The conference was presided over by CPI(M) District Secretary T Arun and CPI District Secretary T Madhu.

Addressing the gathering, CPI(M) State Secretary V Srinivasa Rao stated that corporate entities are exploiting the basin’s rich resources for profit. He pointed out that recommendations of the 12th Finance Commission and a unanimous Parliamentary Standing Committee resolution on the issue have been ignored by the central government.

Chalasani Srinivasa Rao, convener of the Committee for the Attainment of Special Status and State Bifurcation Assurances, criticised the Centre for its indifferent approach towards the state’s resource concerns. CPI State Executive Committee member Akkineni Vanaja highlighted the growing dominance of corporate interests over natural resources and governance. Former MLC and JVV State President K S Lakshmana Rao recalled earlier efforts to secure the state’s share and stressed the need for continued struggle. Other speakers included P Prasad (CPI-ML New Democracy), Bugata Bangarraju (CPI-ML Liberation), Chikkatla Venkateswara Rao, V Sundararamaraju (Forward Bloc), M S  Nagaraju, and Katam Nagabhushanam.

The convention also resolved to organise seminars across the state to intensify the movement, ensure piped natural gas (PNG) supply to households, and bring natural resources under greater public and government control.