Petroleum minister Murli Deora told Rajya Sabha on Tuesday that oil and natural gas producers, including Reliance Industries need not share the marketing margin they charge from their clients with the government.
Answering questions from the upper house member Amar Singh, Deora explained the marketing margin of 0.135 per million metric British thermal unit (mmBtu) that RIL charges from its customers on the sale of natural gas was a bilateral issue between the seller and the buyer.
As per the production sharing contract (PSC) between the government and RIL for gas from the K-G D6 basin, the government has approved a price for gas sale at the PSC delivery point. ?The said price ($4.2 mmBtu for five years) does not include any charge beyond the PSC delivery point. The marketing margin (levied by RIL) is beyond the delivery point and arises as a result of gas sale and purchase agreement signed between the seller and the buyer,? Deora said in a written reply.
The minister?s clarification puts to rest speculation about the director general of hydrocarbons having asked RIL to share the marketing margin with the government. The PSC provides for sharing of revenue between the government and the contractor of the sale of gas at the said price at the delivery point. It does not envisage sharing with the government the revenue earned by the contractor on marketing margin, the minister said further.
