Ministry refers RIL marketing margin issue to regulator | business | Hindustan Times
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Ministry refers RIL marketing margin issue to regulator

In what may lead to another legal spat between Mukesh Ambani-led Reliance Industries Ltd (RIL) and the government, the ministry of petroleum has decided to refer the issue of fixing the marketing margin by RIL to the regulator, petroleum and natural gas regulatory board, on the sale of natural gas from the KG-D6 block, which is India’s largest gas producing block.

business Updated: Jan 12, 2012 23:28 IST
Anupama Airy

In what may lead to another legal spat between Mukesh Ambani-led Reliance Industries Ltd (RIL) and the government, the ministry of petroleum has decided to refer the issue of fixing the marketing margin by RIL to the regulator, petroleum and natural gas regulatory board, on the sale of natural gas from the KG-D6 block, which is India’s largest gas producing block.

RIL, in a December 30 letter to the petroleum ministry, had questioned the legality of the government’s move to regulate marketing margins being charged by it from the consumers of KG-D6 gas.

The company is already fighting a legal battle with the government after it recently served an arbitration notice to the petroleum ministry over disallowing some of the expenditure that the company has made in developing the KG-D6 block. Reliance has so far invested $5.8 billion (or R30,000 crore) in developing the block.

The ministry has sought time till January 31, to respond to RIL’s arbitration notice.

The re-opening of the marketing margins issue is seen as a major set back for Reliance and its partner BP, which has purchased a 30% stake in KG-D6 block of RIL.

RIL had questioned the move and had stated that issue with regard to marketing margin is legally settled and should not be re-opened at this stage for the signed GSPAs.