ADA firm blinks; agrees to pay market margin to RIL

October 09, 2009 11:46 am | Updated 11:46 am IST - New Delhi

Less than a month after it stopped paying marketing margin to Reliance Industries, Anil Ambani Group firm Reliance Infrastructure has agreed to pay the levy, although under protest, and has asked the Mukesh Ambani firm to resume natural gas supplies to its power plant.

R-Infra on October 7 wrote to RIL saying it was instructing its “bank to effect full payment of the invoice (raised by RIL for supply of KG-D6 field gas to its Samalkot power plant) including the marketing margin element.”

The company, which had paid USD 0.135 per million British thermal unit in marketing cost to RIL for over four months without protest, had on September 15 written to the Mukesh Ambani-firm saying it will no longer pay the “unauthorised and illegal” levy.

R-Infra defaulted on payment of Rs. 12 lakh in marketing margin on the 0.56 mmscmd gas supplied to Samalot in the first half of September, leading to RIL sending a notice of suspension of supplies.

“We request you to withdraw the suspension notice dated September 28 and confirm immediate resumption of the supply of gas,” R-Infra vice-president Kamal Kant wrote to RIL.

On the same day, the Anil Ambani Group firm also wrote to ministries of power and petroleum informing of the decision and reiterating its position that the levy was “unauthorised and nothing but abuse of its (RIL’s) monopolistic position.”

An ADAG group spokesperson did not immediately offer any comments on the issue.

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