Millennium Post

Regulator for less marketing margin on gas: Pradhan

“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,” Oil Minister Dharmendra
Pradhan said on Wednesday.

After grappling with the issue for two years, the Oil Ministry had on November 21, 2013, ordered that the margin to be charged, over and above the gas sale price, should be fixed between the seller and buyers in all sectors other than urea and LPG.

The Ministry 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. Both urea and LPG are subsidised.

The regulator on January 21 last year 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.”

“PNGRB has submitted its recommendations to the Ministry on January 20, 2015,” Pradhan said. “The recommendations of PNGRB are under examination in Ministry of Petroleum and Natural Gas.”

User ministries like Department of Fertilizer will be intimated after a decision is taken in the matter, he said. 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.

tate-owned gas utility GAIL India Ltd charges Rs 200 per thousand cubic metres as effort money or marketing margin from consumers like fertiliser plants and power stations. This is for selling natural gas sourced from fields that Oil and Natural Gas Corp (ONGC) had got from the government on nomination basis (called APM gas).

However, a distinction has now been made in the gas produced from fields given to ONGC on nomination basis. Any gas that came into production after 2010 is being treated differently than APM gas for which the government decides the price as well as marketing margin. But for gas from the fields of ONGC that came into production after 2010, it charges nearly double the marketing margin as it treats them as non-APM gas.

It charges a similar marketing margin for gas from western offshore fields of Panna/Mukta and Tapti.

DGH favours quick appointment of arbitrators to end rows: Minister

With Oil Ministry facing a plethora of disputes, regulator DGH has favoured timely appointment of arbitrators by the government and streamlining of dispute resolution mechanism, Oil Minister Dharmendra Pradhan said.

“The Directorate General of Hydrocarbons (DGH) has submitted suggestion for improving the dispute resolution mechanism,” he said in a written reply to a question in the Rajya Sabha. The suggestions include encouraging conciliation proceedings on disputes arising out of interpretation and implementation of oil and gas field contracts and examination. Besides, examination by multi-disciplinary team and executive committee of DGH on potential litigations, the DGH also favoured “timely appointment of arbitrators by the government (and) appointing arbitrators having domain expertise,” he said.

Also, DGH wants powers be delegated to it to create its own panel of law firms/advocates and deciding on their fee. It also wants vetting of proposal by an Adivsory Committee for referring the matters to sole expert/conciliation, he said.

Next Story
Share it