The Petroleum and Natural Gas Ministry on Thursday said the proposal to allow GAIL (India) to charge marketing margin on sale of gas was under the active consideration of the Government.

Talking to journalists here, Petroleum Secretary R. S. Pandey said GAIL had requested the Petroleum Ministry that it be allowed to charge marketing margin on sale of APM gas to cover marketing risks. It is under consideration.

The government regulates the price at which gas produced from fields given to Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) is sold. GAIL has been nominated as the government agency for selling the fuel, called APM (Administered Pricing Mechanism) gas, from such fields. The Petroleum Ministry has proposed to allow the company to charge $0.11 per million British thermal unit (mBtu) as marketing margin.

“No decision has been taken yet. It, along with revision in price of APM gas as had been recommended by the Tariff Commission, has to go to the Union Cabinet for approval. I cannot say what the Cabinet will decide,” Mr. Pandey said.

He said companies like Reliance Industries selling gas other than APM were charging marketing margin which was purely a commercial arrangement between the buyer and the seller. “Petroleum Ministry does not control, approve or intervene in such matters,” he said.

Mr. Pandey said all companies selling non-APM gas from pre- New Exploration Licensing Policy (NELP) blocks or NELP blocks like RIL’s Eastern offshore KG-D6 fields charged marketing margin on the fuel. “The logic of not allowing GAIL to charge marketing margin on APM gas till now is that APM gas is produced by government companies from fields given to them on nomination basis and is marketed by them. All companies, including GAIL selling non-APM gas, charge marketing margin,” he added.

RIL charges $0.135 per mBtu as marketing margin on sale of gas from its KG-D6 fields while GAIL levies $0.18 per mBtu as marketing margin on sale of regassified-LNG.

It levies $0.12 per mBtu marketing margin on sale of gas produced from BG-operated Panna/Mukta and Tapti fields and $0.11 per mBtu on gas from Ravva field operated by Cairn India.

Ties up funds for Assam project

GAIL (India) on Thursday said its prestigious petro-chemical plant in Assam — Brahmaputra Cracker and Polymer Ltd. (BCPL) — has achieved financial closure.

BCPL, in which GAIL holds 70 per cent stake, has tied up Rs. 1,756 crore debt from a consortium of seven banks led by Punjab National Bank, company Chairman and GAIL Chairman and Managing Director B. C. Tripathi said here on Thursday. The Rs. 5,461-crore project would be completed by April 2012, he said.

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