Cabinet nods marketing margin for domestic gas supply to fertilizer units in India

The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval for the determination of Marketing Margin on the supply of domestic gas to Fertilizer (Urea) Units for the period from May 1, 2009, to November 17, 2015.

This approval is a structural reform. 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 the marketing margin on the supply of domestic gas to urea and LPG producers in 2015.

The approval will provide additional capital to the various Fertilizer (Urea) Units for the component of marketing margins paid by them on domestic gas procured during the period 01.05.2009 to 17.11.2015, based on rates already being paid from 18.11.2015 onwards.

In line with government's vision of AatmaNirbhar Bharat, this approval will incentivize manufacturers to increase investment. The increased investment will lead to self-sufficiency in fertilizers, and provide an element of certainty for future investments in the gas infrastructure sector.