Reliance Infra terms RIL marketing margin ‘illegal’, refuses to pay levy

ANIL Dhirubhai Ambani Group (ADAG) company Reliance Infrastructure has described a 13.5 cent per million metric British thermal unit (mmBtu) marketing margin on the supply of KG-D6 gas charged by Mukesh Ambani-promoted Reliance Industries (RIL) as "illegal, unauthorised and unwarranted" and has declined to pay the levy.      "It (marketing margin) is in excess of the price ($4.2/mmBtu) determined by the government which according to you (read RIL) is the price at which you can sell gas under PSC (production-sharing contract)," Reliance Infrastructure vice-president Kamal Kant said in a letter to RIL.      RIL, the operator of KG-D6 block, is selling natural gas produced from the block at a government-determined rate of $4.2/mmBtu (at the land-fall point in Kakinada, Andhra Pradesh) to government-specified customers. RIL, however, charges an additional $0.135/mmBtu as marketing margin from the customers, which, according to the oil ministry, is purely a commercial arrangement between the buyer and the seller.      The ADAG company, which is buying a total 0.54 million standard cubic meter per day of RIL's KG-D6 gas for its Samalkot power plant in Andhra Pradesh since May 10, 2009, wrote a letter on Tuesday to the gas producer refusing to pay the levy and also demanded a "refund with interest".      It could not be ascertained why Reliance Infrastructure kept paying the marketing levy for over four months before raising the issue. An ET query asking the company on the matter remained unanswered. An email query to RIL didn't elicit any response.      Government-owned NTPC, one of the major buyers of RIL's KG-D6 gas, has also expressed reservations over paying the levy. The company wants to include two conditions before signing a gas sales purchase agreement (GSPA) with RIL. These are that the agreement will not have any prejudice or any impact on their pending cases and that the marketing margin will be reviewed by the government, a power ministry official said, requesting anonymity. The empowered group of ministers (EGoM) has allotted 2.67 million standard cubic metres per day (mmscmd) gas from KG-D6 block to NTPC's Anta, Dadri and Faridabad power plants.  RNRL moves Supreme Court  NEW DELHI: Anil Ambani's Reliance Natural Resources (RNRL) on Wednesday moved the Supreme Court, seeking direction to make the stateowned NTPC a party to its ongoing dispute with Mukesh Ambani's Reliance Industries (RIL) over supply of gas from KG basin. It said the legal issue in the case between it and RIL were identical to those which had cropped in a separate legal battle between NTPC and RIL. It said this is necessary to prevent contradictory judgements from being delivered.