Anil Ambani group wants end to gas-marketing margin | business | Hindustan Times
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Anil Ambani group wants end to gas-marketing margin

The Anil Ambani-led Reliance Infrastructure has asked the power ministry to take up the issue of what it calls "unauthorized levy of marketing margin" by Mukesh Ambani's Reliance Industries for the Krishna-Godavari gas.

business Updated: Oct 25, 2009 18:07 IST

The Anil Ambani-led Reliance Infrastructure (R-Infra) has asked the power ministry to take up the issue of what it calls "unauthorized levy of marketing margin" by Mukesh Ambani's Reliance Industries for the Krishna-Godavari gas.

The power ministry has been requested to take the matter up with the empowered group of ministers (E-GoM), under Finance Minister Pranab Mukherjee, set up by Prime Minister Manmohan Singh on the issue of supply and pricing of Krishna-Godavari gas.

"The levy of marketing margin has neither been approved by the E-GoM nor by any regulatory authority. But Reliance Industries has included a charge of $0.135 per unit as part of the sale price of gas," the company's chief executive Lalit Jalan said in a letter to the power ministry.

"This additional $0.135 per unit is also not a part of the price for valuation for determining government stake and, therefore, this charge provides absolutely no revenue to the government," the letter added.

State-owned power utility NTPC, too, had asked the power ministry to ascertain whether the marketing margin levied by Reliance Industries on gas from the Krishna Godavari basin was valid.

The marketing margin is being levied on the hydrocarbon fuel being procured from Reliance Industries for R-Infra's 220 MW Samalkot plant in Andhra Pradesh, based on the allocations made by the government at $4.2 per unit.

This supply is over and above 28 million units of gas a day for 17 years at $2.34 per unit over which Reliance Industries and the Anil Ambani group are fighting a biter legal battle, being adjudicated by the Supreme Court.

"Illegitimate charges such as these directly affect the viability of gas based power generation and hence there is an urgent need to immediately put a stop to such charges. State-owned NTPC had also raised a similar objection earlier," said the letter.

The letter said R-Infra had repeatedly taken up the matter with the oil ministry as it would benefit all power and fertilizer consumers. But, as usual, the ministry is continuing with its partisan approach in favour of Reliance Industries, the letter added.

The Anil Ambani group company was earlier paying the marketing margin under protest to Reliance Industries but had stopped it Sep 15, terming such a levy unauthorised, unwarranted and illegal.

It was forced to resume the payment after gas supplies to its power plant were suspended by Reliance Industries.

The ministerial group, which includes Petroleum Minister Murli Deora, Power Minister Sushilkumar Shinde, Fertilizer Minister MK Alagiri and Law Minister M Veerappa Moily is scheduled to meet in New Delhi October 27.