Government not happy with RIL's 'marketing margin'

The power ministry has clarified that it did not approve of Mukesh Ambani's Reliance Industries Ltd charging marketing margin on the gas it sells, apparently backing the Reliance Infra stand.

"Normally, marketing margins are paid when there is a wholesaler, a distributor, (and) a retailer. But in the case of RIL, there is no wholesaler or retailer. It is a one-man show, one company is doing all that," union power secretary H S Brahma told newspersons in New Delhi.

RIL is charging $0.135 (Rs6.47) per mmBtu as marketing margin on sale of gas from its Krishna-Godavari Basin block, a levy that has been opposed by Anil Ambani's Reliance Infrastructure, which buys 0.56 mmscmd of KG-D6 gas for its Samalkot power plant in Andhra Pradesh. Rel Infra paid the marketing margin on gas till last month, but discontinued it this month, saying it was "illegal and unauthorised".

This has led to yet another tangled wrangle between the two Ambani brothers, as RIL has slapped a notice on Reliance Infrastructure that it will discontinue the gas supply unless its dues are paid. RI has decided to defy the claim. (See: RIL threatens to cut gas supply for Anil Ambani plant) 

NTPC too seeks government clarification
RIL says the marketing margin it charges is uniform for all its 40-odd customers, and is lower than the $0.17 per mmBtu margin charged by state-run supplier GAIL.

But state-run NTPC, the country's biggest power producer, is not happy either. It has asked the power ministry to seek clarification from the oil ministry or from the ubiquitous empowered group of ministers on payment of marketing margin, even as it has provisionally agreed to pay the levy.    

After months of dithering, NTPC this week signed pacts to buy 0.61 mmscm per day of gas from the KG-D6 fields at the government-mandated price of 4.20 per mmBtu plus $0.135 per mmBtu marketing margin. It has, however, sought specific confirmation on payment of the levy from the government.