Reliance Industries Ltd. (RIL) is facing a 40% cut in the marketing margin it charges on selling its KG-D6 gas to fertilizer and LPG plants after the Government notified a ceiling of Rs. 200 per thousand standard cubic meters (scm), reports a business daily.
RIL was charging US$0.135 per million British thermal unit (mmBtu) as marketing margin on sale of KG-D6 gas. This is over and above the gas price of US$4.24 per mmBtu.
Following the Union Cabinet's decision of 18th November on maximum marketing margin, the Union Oil Ministry has issued a gazette notification fixing the levy at a maximum of rS. 200 per thousand scm (on net calorific value of 10,000 Kcal/scm), reports the daily.
At the current foreign exchange rate, the marketing margin being fixed at NCV basis on 10,000 kilocalorie (Kcal) will translate into a levy of US$0.79-0.8 per mmBtu, according to Oil Ministry officials.
All of RIL's 11-12 million standard cubic meters per day of KG-D6 gas is sold to fertilizer plants.
Marketing margin charged on gas produced from Oil & Natural Gas Corp’s (ONGC) fields is INR 200 per thousand scm and will not be changed following the notification, reports the financial newspaper.