Anantkumar Hegde - Parliament

GOVERNMENT OF INDIA

MINISTRY OF PETROLEUM AND NATURAL GAS

LOK SABHA

STARRED QUESTION NO: 405

ANSWERED ON:17.12.2009

MARKETING MARGIN FOR SALE OF GAS

(a) whether the Gas Authority of India Ltd. (GAIL) has sent a proposal to the Government for realization of marketing margin for the sale of gas under the Administered Price Mechanism (APM);

(b) if so, the details thereof;

(d) the price of gas being sold under APM?

ANSWER

MINISTER OF THE STATE IN THE MINISTRY OF PETROLEUM & NATURAL GAS (SHRI MURLI DEORA)

(a) to (d): A statement is laid on the Table of the House. STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF LOK SABHA STARRED QUESTION NO. 405 TO BE ANSWERED ON 17.12.2009 REGARDING MARKETING MARGIN FOR SALE OF GAS

(a): Yes, Madam.

(b) & (c): GAIL (India) Ltd. has requested the Government to allow levy of Marketing Margin on Administered Price Mechanism (APM) gas customers, as is being charged for other non-APM gases, viz., Panna Mukta Tapti (PMT) gas, Regasified Liquefied Natural Gas (R-LNG), etc. It has been stated that GAIL has to undertake marketing activities, like gas supply management, contract negotiation, market tie up, market survey, dispute resolution, customer relationship management , risks involved in drawal of natural gas by consumers, risk of Take or Pay, expenses in the form of bad debts, inventory carrying costs and maintaining administrative infrastructure all over India. Further, the marketing efforts and associated risks are the same for both APM and non-APM customers. GAIL (India) Ltd. has requested for marketing margin of Rs. 330/thousand SCM on sale of APM gas.

(d): The APM rate of gas, except for North Eastern region, is as follows:-

1. For Fertilizers & Power sector customers Rs.3200/thousand SCM

2. For court mandated (CNG/PNG) and Rs.3840/thousand SCM small industries (consuming upto 50,000 SCM per day)

The price of gas for the North- eastern region is at 60% of the above price and is as follows:-

1. For Fertilizers & Power sector customers Rs.1920/thousand SCM

2. For court mandated (CNG/PNG) and Rs.2304/thousand SCM small industries (consuming upto 50,000 SCM per day)

(SCM is Standard Cubic metre)