LNG firms' profits may dipSiddharth Zarabi & Vishaka Zadoo / New Delhi February 09, 2006Tariff commission for capping LNG margins at 1 per cent.In what may erode the profits of companies like Indian Oil, GAIL and Bharat Petroleum, the tariff commission has recommended a trade margin of one per cent on the sale of regassified liquid natural gas (R-LNG). Currently, this margin stands at 2.5 per cent based on a jointly adopted principle by the three companies. The recent final tariff commission report on pricing of cost components for regassification, transportation tariff and marketing margin for R-LNG follows a decision of an inter-ministerial group headed by finance minister P Chidambaram. This may also have an impact on private gas players and those who purchase gas from the intermediary off-takers. As per the calculations of the oil marketing companies, the 1 per cent margin roughly equals Rs 1.97 per million British thermal units (mmbtu). This has the companies all worked up. In fact, Indian Oil Chairman S Behuria shot off a letter to Petroleum Secretary MS Srinivasan on the issue. Bharat Petroleum had also opposed this recommendation, a top company executive told Business Standard. Behuria
