The Union Cabinet, led by Prime Minister Narendra Modi, has approved 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 that aims to provide additional funds to various Fertilizer (Urea) Units for the marketing margins component paid by them on domestic gas procured during that period. The rates will be based on those already in effect from November 18, 2015, onwards.
Marketing Margin is an additional charge imposed by gas marketing companies on consumers, covering the additional risks and costs associated with gas marketing. The government had previously set the marketing margin for the supply of domestic gas to urea and LPG producers in 2015.
Aligned with the government’s vision of AatmaNirbhar Bharat (Self-Reliant India), this approval serves as an incentive for manufacturers to boost their investments. The increased investment will lead to self-sufficiency in fertilizers, and provide an element of certainty for future investments in gas infrastructure sector, the Ministry of Petroleum & Natural Gas said in a release.
This approval comes at a time when the government is also promoting green fuel and biomanufacturing. Finance Minister Nirmala Sitharaman announced a new scheme for converting biomass into Compressed Bio Gas (CBG) and phased mandatory blending of CBG with natural gas to be used as fuel for vehicles and domestic supplies.