Marketing Margin of Natural Gas and LPG

Marketing Margin of Natural Gas and LPG The Minister of State (I/C) in the Ministry of Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the Ministry of Petroleum & Natural Gas has decided that Government needs to regulate the marketing margin for supply of domestic gas to Urea and LPG producers, as the same has implication on Government subsidy outgo. In all other cases the marketing margin should be decided by buyer and seller mutually and any complaints about exercise of monopoly power should be addressed by Petroleum & Natural Gas Regulatory Board (PNGRB) and/or the Competition Commission. Accordingly, Ministry of Petroleum & Natural Gas, vide letter dated 21.11.2013, has requested PNGRB to determine the marketing margin for supply of domestic gas to Urea and LPG producers, through its independent process. The PNGRB has intimated that the entire study on determination of marketing margin is expected to completed by December, 2014.  

 Review of formula for pricing of gas production 

Review of formula for pricing of gas production
The Minister of State (I/C) in the Ministry of Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the present formula of pricing of gas in blocks licensed under New Exploration Licensing Policy (NELP) was due for revision with effect from 1st April, 2014. It was earlier approved by the previous Government for a period of 5 years and was to remain valid up to 31st March 2014. As per approval of the previous Government, the Domestic Gas Pricing Guidelines were notified on 10.01.2014, which envisaged the revised gas prices to become applicable from 1st April, 2014.

The new Government considered the gas price issue in the CCEA meeting held on 25th June, 2014 and noted that the whole issue of gas pricing would need comprehensive re-examination. Accordingly, it was decided that the Domestic Natural Gas Pricing Guidelines, 2014 will be kept in abeyance up to 30.09.2014 and till time, the domestically produced gas would continue to be priced at the rate prevailing on 31.03.2014.