GAIL threatens to cut gas supplies to IPCL

Vol 9, PW 22 (23 Feb 06) News in Brief

GAILhas threatened to cut off gas supplies to Reliance subsidiary Indian Petrochemicals Corporation (IPCL) from 10th March over non-payment of a marketing margin of Rs222 per thousand cubic metres.

But a source close to IPCL tells us it is not liable to pay because the oil ministry raised the ceiling price to $3.86 per mmbtu from July 2005 but did not introduce any marketing margin. GAIL is not doing any marketing, he says.

How can they charge marketing margins Even if any are payable well payONGC which produces the gas. Says another source: GAIL does not have any mandate from the oil ministry to charge marketing margins.

GAIL is contracted to supply 900, 000 cm/d gas to IPCL at Vadodra and 600,000 cm/d at Nagothane. In a statement issued on 22nd February, GAIL denies it is charging a marketing margin on the gas.