IPCL takes Gail to ministry on termination notice

Indian Petrochemicals Corporation (IPCL), a Mukesh Ambani group company, has approached the petroleum ministry against the supply termination notice served by Gail saying the state-owned company was not entitled to charge marketing margin on the government-controlled gas it sold to industries.

Gail had, on February 9, 2006, served a notice to terminate gas supplies to IPCL unless it cleared Rs 64.02 lakh outstanding towards marketing margin.

An oil ministry official said Gail had demanded a marketing margin of Rs 222 per thousand cubic metre on the government administered gas, which it was supplying to IPCL's plants at Baroda and Gandhar (Gujarat) and Nagathone (Maharashtra).

"The government's gas pricing order, which revised the price to Rs 3,200 per thousand cubic metre with effect from July 1, 2005, does not provide for any marketing margin over and above the transportation tariff being realised by gail," a spokesperson for IPCL said.

Gail had stated yesterday that "IPCL has not signed the revised gas supply agreement with Gail after the government pricing order, which came into effect from July 1, 2005," and added that it was ground enough to terminate supplies.