Govt may allow GAIL to charge marketing margin

In a significant development, the government may allow state gas utility GAIL India to charge a marketing margin on sale of administered pricing mechanism (APM) or subsidised natural gas.

The government currently regulates the price at which the gas produced from fields given to Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) 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 the revision of APM gas price, the petroleum ministry has proposed to allow the company to charge $0.11 per million British thermal unit (mBtu) as marketing margin, official sources said.