RIL justifies levy

Under pressure to cut the marketing margin on its gas, RIL has sought to justify the levy.

In a letter to Union power secretary H S Brahma, RP Sharma, president, RIL Gas has noted the various risks his company was taking in selling the gas.

RIL has to pay royalty to the government even if a customer defaults, he has noted.

“Under the gas sale and purchase agreements (GSPAs), seller of gas is liable to pay certain penalties in case of non-supply of gas. RIL has agreed to reimburse ship charges or pay charges to the customers if such ship or pay charges are on account of shortfall in supply from sellers. Such charges are not cost recoverable under the PSC,” Sharma has stated.

The RIL official has also cited the example of state-run gas producers and marketers such as GAIL, Indian Oil Corporation and Bharat Petroleum that charge marketing margins in the range of $0.12-$0.18 per mmBtu on sale of gas produced from fields allocated to them by the government. Batting for state-run power utility NTPC, Brahma had on Friday said that the marketing margins being charged by RIL were illegal.

“It has been clarified by the Ministry of Petroleum and Natural Gas that marketing margin has to be discussed and settled between seller and buyer of gas in settlement of terms of the GSPA,” Sharma has added, bringing the ministry in direct confrontation with the power ministry.