Cabinet fixes marketing margin for domestic gas

The Union Cabinet on Wednesday gave its approval for the determination of marketing margin for supply of domestic gas to urea and LPG producers.

Marketing margin is the charge levied by gas marketing companies on its consumers over and above the cost or basic price of gas for taking on the additional risk and cost associated with marketing gas.

The rate would be fixed on a non-discretionary basis. The issue of vast disparity in marketing margins was looked into by the Petroleum and Natural Gas Regulatory Board (PNGRB) and the marketing margin finalised on Wednesday is based on the recommendations of PNGRB, the statement said.

Currently, different transporters are charging different marketing margins for supply of natural gas. With this decision, there would be uniformity in the marketing margin on domestic gas charged by gas marketers for the regulated sectors, namely, Urea and LPG.

There would be a reduction in marketing margin paid by Urea and LPG producers as a result of this decision, an official statement saidCurrently, the state-owned Oil and Natural Gas Corp and GAIL India charge marketing marging at the rate of Rs 200 per thousand cubic meters. But Reliance India charges at Rs 225 on its eastern offshore KG-D6 gas. It charges in US dollars.