The Hindu Business Line : ADAG seeks refund of marketing margins on RIL gas sales

New Delhi, Sept. 16 Reliance Infrastructure Ltd, an Anil Dhirubhai Ambani Group (ADAG) company, has asked the Mukesh Ambani-led, Reliance Industries Ltd (RIL) to refund with interest the marketing margins levied by RIL on gas sales.

The ADAG company termed the levy of marketing margin by RIL as ‘illegal, unauthorised and unwarranted’.

Referring to its gas sales and purchase agreement (GSPA) inked with RIL on April 27 for supply of 0.54 mscmd of gas at $4.2/mBtu (landfall point), Reliance Infrastructure said, “Our gas supply agreement is not a result of any marketing undertaken by you or any other agency. Since there has been a complete absence of any marketing, the charge in respect of marketing margin is clearly unwarranted.”

In a letter to RIL, it said, “Upon the commencement of supply of gas, you have raised invoices for sale and supply of gas which includes a charge towards marketing margin at the rate of $0.135/mBtu.”

Reliance Infrastructure in its letter also said, “You have been taking a stand that you can sell gas only at the price approved by the Government…….marketing margin has not been a subject matter of consideration or approval by the Government.”

Further, it appears that the sale consideration charged under ‘marketing margin’ is not even shared with the Government, Reliance Infrastructure said.

“In these circumstances the charge towards the marketing margin imposed by you being in the nature of sales price is illegal, unauthorised and unwarranted. It is in excess of the price determined by the Government, which according to you (RIL) is the price at which you can sell gas under the production sharing contract. It is not even shared with the Government as a part of profit petroleum,” the letter said.