GAIL wants to pay full amount for PMT gas

Vol 6, PW 23 (29 Jan 03) News in Brief

Imagine a situation where your customer wants to pay the full amount but is only permitted by the government to pay 90%.

Believe it or not this is a predicament faced by GAIL since 1997 in its payments for gas from the Panna, Mukta and Tapti consortium. Since then, GAIL has been depositing the balance 10% in a separate bank account, in line with government orders.

Lack of a firm Gas Sale Purchase Agreement is behind the government decision to split the payment. For some time ONGC has been demanding that GAIL stop this practice and begin paying the full amount.

GAIL agrees, and has asked the oil ministry for permission, but to no avail. "The matter is quite complex," reveals a ministry source.

"It requires further deliberation and may also lead to arbitration."