Oil regulator, the Petroleum and Natural Gas Regulatory Board (PNGRB) has recommended a range of Rs 150-200 per thousand cubic meters of gas ($ 0.115 per million British thermal unit) as a marketing margin for domestic gas being supplied to fertilizer and LPG plants.
The PNGRB’s recommendations to the Ministry of Petroleum and Natural Gas are under examination and after a decision is taken in the matter, the same will be intimated to the Department of Fertilizers, but they are about 11.5 cents, less than what state-run GAIL and Reliance Industries currently charge from gas users. Presently, marketing margins charged by producers and sellers of gas range from 11 cents to 20 cents per mmBtu. RIL charges 13.5 cents per mmBtu as marketing margin over and above the government-set price of $4.205 for its eastern offshore KG-D6 gas, while State-owned gas utility GAIL India charges Rs 200 per thousand cubic metres as marketing margin.
The regulator who submitted its recommendations to the Ministry on January 20, 2015, had last year on January 21 called for bids from consultants 'to assist it in the task of determination of marketing margin for supply of domestic gas to urea and LPG producers for recommending this to the government.” The Ministry of Petroleum and Natural Gas had decided that government needs to regulate the marketing margin for supply of domestic gas to urea and LPG producers, as the same has implications on government subsidy outgo as both urea and LPG are subsidised.
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