Deora favours RIL on royalty issue

Overturns oil regulator's recommendation

PTI | February 23, 2010



Oil Minister Murli Deora today said Reliance Industries need not club marketing margin with the gas sale price for purpose of calculating royalty - a statement that overturns a suggestion by oil regulator DGH.

DGH had wanted the $0.135 per million British thermal unit margin, which RIL charges towards marketing cost and risks, to be added to the sale price of $4.20 per mmBtu for calculating royalty and profit share to the government.

"The Production Sharing Contract (under which firms like RIL produces oil and gas from areas given by the government) does not envisage sharing of revenue earned by the contractor (RIL) on the marketing margin between the government and the contractor," Deora told Rajya Sabha.

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