Cabinet Approves Gas Marketing Margin for Urea Plants

New Delhi, Feb 1 (PTI) The Cabinet on Thursday approved determination of marketing margin on supply of domestic gas to fertiliser (urea) units for the period from May 1, 2009 to November 17, 2015.

"This approval is a structural reform," Ministry of Petroleum & Natural Gas said in a release.

Marketing margin is charged by gas marketing companies from consumers over and above the cost of gas for taking on the additional risk and cost associated with marketing of gas. The government had previously determined marketing margin on supply of domestic gas to urea and LPG producers in 2015.

"The approval will provide additional capital to the various fertiliser (urea) units for the component of marketing margins paid by them on domestic gas procured during May 1, 2009 to November 17, 2015, based on rates already being paid from November 18, 2015 onwards," the release said.

In line with the government's vision of AatmaNirbhar Bharat, the approval will incentivise manufacturers to increase investment.

The increased investment will lead to self-sufficiency in fertilisers, and provide an element of certainty for future investments in gas infrastructure sector.