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RIL need not pay royalty on marketing margin: Deora

RIL need not pay royalty on marketing margin: Deora
PTI
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First Published: Tue, Feb 23 2010. 10 47 PM IST
Updated: Tue, Feb 23 2010. 10 47 PM IST
New Delhi: Oil minister Murli Deora on Tuesday said Reliance Industries Ltd (RIL) need not club marketing margin with the gas sale price for the purpose of calculating royalty—a statement that overturns a suggestion by the Directorate General of Hydrocarbons (DGH).
DGH had wanted the $0.135 (around Rs6) per million British thermal unit margin (mmBtu), which RIL charges towards marketing cost and risks, to be added to the sale price of $4.20 per mmBtu for calculating royalty and profit share to the government.
“The production sharing contract (PSC) (under which firms such as RIL produce oil and gas from areas given by the government) does not envisage sharing of revenue earned by the contractor (RIL) on the marketing margin between the government and the contractor,” Deora said.
“The marketing margin is beyond the delivery point and arises as a result of Gas Sale and Purchase Agreement signed between the seller and the buyer,” Deora said.
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First Published: Tue, Feb 23 2010. 10 47 PM IST