GAIL demands Rs151cr ($32.82m) in LPG freight

Vol 8, PW 13 (22 Sep 04) News in Brief

GAIL is angry with IOC, BPCL, IBP and HPCL for failing to pay Rs151cr ($32.82m) in LPG freight charges.

On 6th September, GAIL finance director JK Jain wrote to joint secretary refineries Prabh Das complaining that for the past three years IOC, BPCL, HPCL and IBP have not paid notional freight charges for LPG bought from GAIL Non-payment of inland freight is disturbing our cash flow, writes Jain. Under government rules, GAIL is forced to sell its LPG to state companies at a price equivalent to imported prices.

This includes notional freight charges. On 20th April, the four companies agreed to pay GAIL the equivalent of 75% notional rail freight charges.

GAIL accuses the companies of not honouring their commitment and wants them to pay 100% equivalent rail freight. In total the companies owe GAIL Rs71cr ($15.43m) for 2002-03; Rs65cr ($14.13m) for 2003-04; and Rs15cr ($3.26m) till 30th June this year.