In a significant development, the government may allow state gas utility GAIL India to charge a marketing margin on sale of administered pricing mechanism or subsidised natural gas.
The government currently regulates the price at which the gas produced from fields given to Oil and Natural Gas Corp and Oil India Ltd is sold. GAIL has been nominated as the government agency for selling the fuel, called APM gas, from such fields.
GAIL is not allowed to levy any charge for the marketing effort on selling this gas but in a draft Cabinet note on revision of APM gas price, the petroleum ministry has proposed to allow the company to charge $0.11 per million British thermal unit as marketing margin, official sources said.
The note states GAIL should be paid marketing margin to compensate it for the large risk like non-payment of bills, billing cost, inventory management and marketing effort.
At present, GAIL charges $0.18 per mmBtu as marketing margin on sale of regassified-LNG and $0.12 per mmBtu for sale of gas produced from BG-operated Panna/Mukta and Tapti fields. It charges $0.11 per mmBtu for selling gas from Ravva field operated by Cairn India.
The move comes amidst protests over Reliance Industries charging $0.135 per mmBtu marketing margin on gas from its KG-D6 fields. While NTPC has sought specific confirmation of the levy, Anil Ambani Group firm Reliance Infrastructure stopped paying the charge this month.
© 2025