Gail can't charge mrkting margins: Oil Secy | india | Hindustan Times
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Gail can't charge mrkting margins: Oil Secy

The Gas Pricing Order of 2005 does not allow Gail to charge marketing margin on the government regulated gas.

india Updated: Feb 23, 2006 15:05 IST

The government said on Thursday that the Gas Pricing Order of 2005 does not allow state-run Gail India Ltd to charge marketing margin on the government regulated gas.

"I do not think the Gas Pricing Order says that. Anyway, we have called an internal meeting to discuss the issue," Petroleum Secretary MS Srinivasan told reporters.

Srinivasan was replying to queries regarding the on-going tussle between Gail and Mukesh Ambani-controlled IPCL on the issue.

GAIL had on February 9 served a notice to terminate gas supplies to Indian Petrochemicals Corp Ltd unless it cleared Rs 64.02 lakh outstanding towards marketing margin.

IPCL has since then approached Petroleum Ministry against the termination notice served by GAIL, saying the state-owned firm was not entitled to charge marketing margin on the Government-controlled gas it sold to industries.

GAIL had demanded a marketing margin of Rs 222 per thousand cubic meters on the government administered or APM gas which it was supplying to IPCL's plants at Baroda, Gandhar (Gujarat) and Nagathone (Maharashtra).

Government's Gas Pricing Order, which revised APM gas price to Rs 3200 per thousand cubic meters with effect from July 1, 2005, does not provide for any marketing margin over and above the transportation tariff being realised by GAIL, an oil ministry official said.