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The Cabinet has given its approval for a uniform marketing margin for supply of domestic gas to urea and LPG producers.
“This decision is a structural reform…With this decision, there would be uniformity in the marketing margin on domestic gas charged by gas marketers for regulated sectors – urea and LPG,” the government said in an official statement on Wednesday.
The statement added that this would result in a reduction of the marketing margin paid by urea and LPG producers.
Marketing margin is levied by gas marketing companies on its consumers over and above the cost or basic price of gas for taking on the additional risk and cost associated with marketing gas. At present, different transporters are charging different margins for gas supply. The rate would be fixed on a non-discretionary basis by the Petroleum and Natural Gas Regulatory Board. Further escalations up to the WPI would be decided by the Oil Ministry.
“The issue of vast disparity in marketing margins was looked into by the PNGRB. This decision is likely to enhance transparency and provide an element of certainty for future investments in the gas infrastructure sector,” the statement said.
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