04 July 2010;business-standard.com:New Delhi: At present, over 70 per cent cars in the country are financed Interest rates on auto loans are set to go up 25-50 basis points from next week following the 25 basis points hike in repo and reverse repo rates by the Reserve Bank of India (RBI). Car buyers will now have to shell out an additional Rs 100 as EMI on a Rs 4,00,000 loan for a period of 36 months. This will be the second hike in interest rates in the current financial year. Banks had hiked rates by 25 basis points around April — the existing rate of interest on automobiles varies between 9.5 per cent and 12.5 per cent. At present, over 70 per cent cars in the country are financed and the average ticket size of a car loan is Rs 3 lakh for a period of three years. According to latest sales numbers, total passenger vehicle sales in the country went up 26.8 per cent to 1,76,920 units in June as compared to 1,39,490 units in June 2009. “We will review interest rates on auto loans next week and are looking at raising it by at least 25 basis points, which will be a marginal increase over the exiting rates of 9.75 per cent,” Sumit Bali, chief executive officer, Kotak Mahindra Prime, said. According to Manju Srivatsa, president (retail), Axis Bank, interest rates depend on multiple factors and there is scope for another hike from next week. “The bank has already taken a hike of 25-50 basis points two months ago and this will be the second hike in four months of the ongoing financial year.” Analysts, however, feel the current hike is minuscule and will not impact the overall sentiment in the market. In other words, the demand for automobiles will continue, although the growth curve may taper down a bit. “Even if banks decide to hike interest rates after the RBI decision, it will not impact the purchasing decision of Indian car buyers. However, we may see overall growth moderating to 15-18 per cent as against over 30 per cent that we have been seeing since January this year, as the pent-up demand has been met with several new launches in the passenger car category in the past,” said VG Ramakrishnan, senior director (automotive practice), Frost &Sullivan.
03 July 2010;deccanherald.com:Bangalore:Several organisations have decided to ensure a total shutdown on Monday from 6 am to 6 pm, when the Left parties and the NDA observe Bharat bundh against the recent fuel price hike. However, essential commodities and services will not be hit and security will be tightened to avoid any unforseen incidents, officials said. The Karnataka Milk Federation, extending support to the strike, requested the organisers not to obstruct the transportation and distribution of milk. “We have also been affected by the increase in the fuel prices. Hence, we backed the strike, but asked the organisers to spare milk from the strike,” an official said. The KMF has also asked individual milk unions to be “prepared” for the bundh and make arrangements for extra supply. The 60,000-odd autorickshaws and taxis in the City will also remain off roads, with the autorickshaw drivers’ unions deciding to back the strike. According to president of the Autorickshaw Drivers' Organisations’ United Struggle Committee, M Manjunath, the unions were joining the strike to push for an increase in minimum fare. Government buses, both Karnataka State Road Transport Corporation (KSRTC) and Bangalore Metropolitan Transport Corporation (BMTC), will ply as usual. “All our inter-State services, including Airavata (Volvo) services will be plying as usual. We have issued general instructions to all depots across the State to exercise caution. If any violence erupts, we will withdraw sector-specific services,” said K A Rajkumar, General Manager (Operations) of the KSRTC. However, the BMTC has postponed observation of the monthly ‘Bus Day’ programme from July 5 to 7 in view of the bundh. Truck operators, too, have backed the bundh in the State.
Government intervention if crude oil prices turn volatile: Deor
03 July 2010;hindustantimes.com:Bangalore: The central government will step in to regulate the decontrolled price of petrol if crude oil rates turn highly volatile in the international markets, Petroleum and Natural Gas Minister Murli Deora Friday said. "The government will not be a silent spectator in the event of crude oil prices turning volatile or remaining higher as it is our duty to protect consumers. The oil marketing firms are free to fix the petrol price when crude oil price is in the manageable range," Deora told reporters here. Justifying the price hike for the four basic petroleum products - petrol, diesel, kerosene and cooking gas (LPG) - last week, he said the government had no alternative but raise their prices and free petrol pricing from its control. "We consider a range of $60-66 per barrel comfortable for oil companies to determine the market-driven price of petrol. They are working on the measures to revise the rates in line with the international crude prices," Petroleum Secretary S. Sundereshan said. In a major reform move June 25, the government decontrolled petrol pricing, with an increase of Rs.3 per litre, diesel by Rs.2, kerosene by Rs.3 and cooking gas by Rs.35 per cylinder. "Our job is to see that the decontrolled price of petrol will not have any adverse effect on consumers," Deora asserted. The state-run oil marketing firms - IOC, HPCL and BPCL - are working on the modalities, including periodicity of revision of petrol price in consultation with the petroleum ministry. Clarifying the ministry's position on under-recoveries, Deora said losses incurred on the regulated prices of diesel, kerosene and cooking gas would have to be absorbed by marketing firms as there would not be any compensation from the government in the form of oil bonds.
9 IOC officials arrested in Jaipur depot fire case
02 July 2010;deccanherald.com:Jaipur: Nine Indian Oil Corporation (IOC) officials, including general manager Gautam Ghosh, have been arrested for criminal negligence in a major fire at its depot in October last year in which 11 people were killed, police said on Friday. "We have arrested nine IOC officials under various sections of the Indian Penal Code (IPC) including section 304 (culpable homicide not amounting to murder and carrying a maximum sentence of ten years in prison)," Inspector General (Jaipur zone) B.L. Soni told reporters. The blaze broke out in the depot in Sitapura industrial area, about 20 km from the Jaipur city centre, at 7.15 p.m. Oct 29 and took around 10 days to extinguish. A few cases charging IOC with criminal negligence were filed by local residents and private companies in the first week of November 2009, following the blaze in which 150 people were also injured. The total losses suffered by Indian Oil amounted to nearly Rs.280 crore (Rs.2.8 billion) and the total loss of petroleum products was about 60,000 kilolitres. An independent probe report released in February this year found human error, lack of safety procedures and design flaws to be the major reasons responsible for the fire. "The basic or root cause is an absence of site-specific written operating procedures, absence of leak stopping devices from a remote location and insufficient understanding of hazards, risks and consequences," M.B. Lal, who chaired the independent inquiry committee, said. In a 2003 audit, the Oil Industries Safety Directorate found that the remote leak stopping device was not working at the Jaipur terminal. The inquiry found that despite the recommendation in 2003, the device was never operational in the last six years, he added.
02 July 2010;deccanherald.com:Bangalore:A pipeline commissioned on Friday at the Indian Oil Corporation (IOC) terminal in Devanagonthi near Hosakote to bring petroleum products from Chennai to Bangalore might help meet the City’s need for speedy and uninterrupted fuel supply. Petroleum products are traditionally being transported by freight trains or by road. The new pipeline is the second one to be constructed to supply oil to Bangalore. The first pipeline, transporting fuel from Mangalore via Hassan to Bangalore, was launched a few years ago. The 290-km underground pipeline, commissioned on Friday by Governor H R Bhardwaj, was completed at a cost of Rs 270 crore, three months ahead of schedule. It has an installed capacity to transport 1.45 million tonnes of white fuel (petrol, diesel, kerosene and aviation turbine fuel) per annum from the Chennai Petroleum Corporation Manali refinery to Bangalore via Chittoor. About 96 km of the pipeline traverses through Tamil Nadu, 111 km through Chittoor district of Andhra Pradesh. The remaining 83 km of it passes through Karnataka. The IOC already has a 36-km-long pipeline connecting the Devanagonthi terminal to Bangalore International Airport at Devanhalli to supply aviation turbine fuel. Union Minister for Petroleum and Natural Gas, Murli Deora, who spoke at the pipeline’s inauguration, said the Opposition parties should have introspected before calling for a nationwide stir on July 5 to protest against rise in fuel prices. ‘Consumption increasing’ In his address, Petroleum Secretary S Sundareshan said that the consumption of petrol and diesel was increasing at 15 and 10 per cent, respectively, per annum and the state-run oil companies were prepared to meet the increased demand. “The Gas Authority of India Limited (GAIL) will build a pipeline from Dabhol in Maharashtra to Bangalore and another from Kochi in Kerala to Chennai via Mangalore and Bangalore at a cost of Rs 5,000 crore by 2012. “Reliance Petroleum is also building a pipeline from Chennai to Bangalore to supply gas for power projects and other industrial users, while the Mangalore Refinery Petroleum Limited (MRPL) is investing Rs 15,000 crore to increase its refining capacity,” Sundareshan said. Gramin LPG scheme Earlier, Governor Hans Raj Bhardwaj also launched Rajiv Gandhi Gramin LPG Vitarak Yojana, a Central scheme that aims to establish small, low-cost LPG distributor units in rural areas. Four beneficiaries were allotted distributorship after random selection. An additional 124 dealers will be soon appointed across the State.
Two-wheelers vroom into rural India to end June on a high
02 July 2010;business-standard.com:Mumbai:Growth in spending in rural areas on the back of a promising monsoon season has resulted in double-digit increase in sales of Hero Honda, TVS, Honda Motorcycles, Yamaha and Mahindra 2 Wheelers for the month of June. India’s largest two-wheeler maker, Hero Honda Motors, today reported sales of 426,454 units, a 16.6 per cent growth as compared to 365,734 units in the same month a year earlier. Hero Honda, which makes the Splendour and Passion brands, is followed by Bajaj Auto. About half of Hero’s sales came from rural India. Says Anil Dua, senior vice president (marketing and sales), “The 16 per cent growth in June is very encouraging, coming as it does on the back of the high base of our sales last year.” Chennai-based TVS Motor Company posted an increase of 33 per cent in domestic sales of its two-wheeler range, while also logging its highest-ever three-wheeler sales in a month. The company, which also makes the Scooty brand of automatic scooters, sold 139,905 units of two-wheelers during the month as compared to 105,361 units sold in the same month a year earlier, a statement said. Motorcycle sales recorded growth of 44 per cent during the month, of 66,452 units as against 46,048 units in the month last year. Sales of scooters grew by 42 per cent to 36,742 units, as compared to 25,945 units a year earlier. Three-wheeler sales increased to 3,003 units in the same month, as compared to just 810 units sold in the same month a year ago. Honda Motorcycle and Scooter India (HMSI), leader in the automatic scooter segment, trounced TVS for the third spot in the domestic two-wheeler market, selling 146,073 units for the reporting month. HMSI recorded growth of 41.5 per cent for the month as compared to sales of 103,209 units for the same month a year earlier. Motorcycle sales were 66,334 units, a growth of 50 per cent, while sales of scooters grew by 35 per cent to 79,739 units. Mahindra 2 Wheelers, the latest company to join the market, posted sales of 10,017 units in June, a growth of 329 per cent as against 2,333 units in the month last year. The company has three automatic scooters, the Duro, Rodeo and Flyte. It would enter the high-volume motorcycle segment before the end of this year. India Yamaha Motor, subsidiary of Yamaha Motor Corporation, recorded an 18 per cent rise in domestic sales of its motorcycle range to 21,157 units in June, compared to 17,878 units posted in the same month a year earlier.
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