Anil Ambani group firm Reliance Energy [Get Quote] on Monday accused elder brother Mukesh-led Reliance Industries [Get Quote] of holding power and fertiliser sectors to 'ransom' by demanding artificially inflated price for natural gas.

Reacting to reports that RIL has warned of cartelisation in case it is asked to invite fresh bids for selling gas, REL Director J P Chalasani said: "It is shocking that RIL, a private sector monopoly producer of gas, is raising the bogey of cartelisation, to prevent a transparent rebidding process."

Chalasani said in a statement that RIL's "arrogance was now transgressing all limits," as it trashes the findings of a Committee of Secretaries and the Prime Minister's Economic Advisory Council, which advocated a fresh and transparent rebidding process.

The reaction came after RIL President and CEO (Petroleum) P M S Prasad wrote to Petroleum Secretary M S Srinivasan, saying a fresh bidding process for price discovery would distort market and lead to cartelisation as bidding would be now done under a pre-conceived allocation mechanism.

"RIL is holding the growth of the power and fertilisers sectors to ransom, by demanding artificially inflated pricing for gas, owing to its monopoly producer status," he said.

The two sides are already battling it out in Bombay high court on gas supplies from RIL's KG basin field to REL's sister concern Reliance Natural Resources Ltd [Get Quote] for Anil Ambani group's proposed Dadri power plant in Uttar Pradesh.

The PM's Council had in view of doubts about transparency of the bidding process suggested rebidding although it acknowledged the competitiveness of RIL's pricing formula. An Empowered Group of Ministers will also meet on Tuesday to discuss the issue.

Gas price: RIL warns of cartelisation