IOC to buy natural gas from RIL for replacing costlier fuel
12 May 2010;timesofindia.indiatimes.com:NEW DELHI: The state-owned Indian Oil Corp (IOC) will buy 1.6 million cubic metres of natural gas a day from Reliance Industries (RIL) to replace costlier liquid fuel at its refineries. IOC currently uses crude oil or fuel oil for production of hydrogen at its refineries, and natural gas from RIL's eastern offshore KG-D6 field will replace the costlier fuel, a senior company official said. "We have tied up with GAIL India for transportation of the gas and are now waiting to initial the Gas Sale and Purchase Agreement (GSPA) with RIL," he said. Last year, an Empowered Group of Ministers had allocated 5.384 mmcmd of gas from KG-D6 to public and private sector refineries, against their demand for 22.8 mmcmd. IOC had demanded 6.58 mmcmd of gas for its Gujarat, Mathura and Panipat refineries, but as refinery as a sector was allocated less than one-fourth of its demand, the state- owned firm is being proportionately given 1.6 mmcmd, he said. Gas flow to IOC's Koyali refinery in Gujarat is likely to start this month, and the same to Panipat would begin later this year after state gas utility GAIL builds a pipeline to carry the fuel to the unit. The official said that while Koyali will draw about 0.8 mmcmd, the rest would be used at its Panipat refinery. Last year, IOC had sought 1.92 mmcmd of KG-D6 gas for its Koyali refinery near Vadorara, 0.81 mmcmd for its Mathura unit in Uttar Pradesh and 3.85 mmcmd for its Panipat refinery in Haryana. Besides this, Bharat Petroleum had sought 2.18 mmcmd for use at its Mumbai refinery, while Hindustan Petroleum wanted another 2.18 mmcmd for its refinery in the same city. RIL wanted 11.23 mmcmd at its twin refineries at Jamnagar in Gujarat while the neighbouring Vadinar unit of Essar sought 1.57 mmcmd. All the refineries have been allocated KG-D6 gas proportionately, out of the 5.384-mmcmd firm allocation made by the EGoM in October last year. An additional 6 mmcmd was allocated to them on a fall-back or temporary basis. While RIL's twin refineries have been given 4.49 mmcmd each, BPCL has been allotted 0.26 mmcmd, the official said, adding that the two firms are already drawing gas from KG-D6. Use of gas in oil refining helps companies save on input costs and meet environmental norms.
12 May 2010;business-standard.com:Swaraj Baggonkar:Mumbai: For the first time in a decade after it entered the Indian market, Ford has found it necessary to start a second shift at its Maraimalai Nagar factory in Chennai. This is an attempt by the American motor company to bring down the huge backlog of orders for the Figo, the compact car whose record number of bookings has been only second to Maruti's Ritz. There have been over 15,000 bookings for the Figo during the past eight weeks. The company is asking its consumers to wait for five to six weeks for delivery. Similarly, people have been queuing to book the Polo, the hatchback from the Volkswagen brand, positioned in the premium compact segment and dearer by about Rs 1 lakh than the Figo. Volkswagen officials say due to limited supply of the car, half of whose components, including the engine, have to be imported, it has been forced to ask consumers to patiently wait for almost five months to get possession. Toyota Kirloskar Motors, the Indian subsidiary company of Toyota Motor Corporation, was forced to turn down booking requests for its top-selling sports utility vehicle, Fortuner, due to inadequate availability of kits. The company has not accepted any bookings for the SUV since February and does not intend to reopen the bookings before the end of next month. Officials say it has entertained only those requests (too few in number) which were on a priority basis and were too 'difficult' to turn away. Newer options attract Indian car buyers have swayed towards newer options offered by global car giants such as General Motors, Ford, Toyota and VW over the past couple of months, impacting sales of models which were once flagship ones. WagonR, the second-largest selling brand of Maruti Suzuki, suffered a 27 per cent hit in March, when the company was able to sell just 11,084 units compared to 15,108 units sold in the same month last year, according to research firm JD Power and Associates. Similarly, sales of Alto, the largest selling car brand in India, also declined by a whopping 30 per cent to 16,397 units as against 23,569 units in the same month last year. Tata Indica and the Honda CR-V also saw sales go down by 15 per cent and 77 per cent, respectively, in the reporting month. Neeraj Garg of Volkswagen Group Sales India said, "Most people out there want a car which looks different than everybody else's. It is not necessary these days that you will buy the same brand your dad used to own. People want change and they are ready to pay the price for it." While VW, General Motors and Ford are ramping up capacity, others such as Maruti Suzuki and Toyota are facing constraints in doing so. Demand for the low-cost van from Maruti, the Eeco, has gone through the roof, with monthly sales being close to 3,000 units. Toyota is facing problems at its Bangalore-based factory, as the plant has only one production line which is used to manufacture three different vehicles. The company has to balance production so as to not hurt consumer demand or market share. "We have doubled the production of the Fortuner to 950-1,000 units per month but even this is proving to be less. We will do a review in July," said Sandeep Singh, deputy managing director, sales and marketing, Toyota Kirloskar Motors. With more cars lines due for launch, ranging from compact cars to mid-size sedans in the coming months, such as that of Nissan, Toyota, Renault, Honda and Ford, the market will see even more competition in future.
12 May 2010;hindustantimes.com:Sumant Banerji:New Delhi: The global meltdown may have left automobile companies battered but Japanese companies Toyota, Honda and Suzuki found growth solace in India. In 2009-10, this troika posted its highest growth in car sales here, even as sales fell in US and Europe. Suzuki Motor Corporation's subsidiary Maruti not only grew the fastest in 2009-10 but almost doubled the profits (Rs 2,625 crore) of the parent company's Rs 1,395 crore. A growth of 21 per cent facilitated Maruti breaching the 1 million production mark this year. Parent SMC's worldwide growth was just 2 per cent --- it plummeted by 7 per cent in both Europe and Japan, while production was almost wiped out in US with sales falling by 52 per cent to 41,000 units. Ditto for Honda and Toyota --- though on a much smaller base. "Our growth this year was because we introduced the Fortuner along with continued dominance of the Innova and Corolla," said Sandeep Singh, deputy managing director, Toyota Kirloskar Motor Ltd. The company's sales rose by 36 per cent --- they fell by 10 per cent in the US and 15 per cent in the Europe. Apart from India, the company's growth markets were China (up 35 per cent) and Japan (15 per cent). But with sales of a little over 63,000, its contribution to worldwide sales of 7.3 million is marginal. In the case of Honda, while sales crashed in Europe and the US, they rose a healthy 40 per cent in India. Like Toyota, while it grew by 24 per cent in China and 16 per cent in Japan, the small base of under 66,000 units makes the growth statistically insignificant to the company's total sales of 3.3 million. The numbers may get bigger themselves as both companies look to launch at least one small car within the next two years in an industry where small car sales account for over 70 per cent of total sales. "Our sales in India will continue to grow simply because the market itself is one of the fastest growing in the world," said Jnaneshwar Sen, vice president (marketing), Honda Siel Cars India. "Besides our existing cars, our second small car that will hit the market by 2011 will bring incremental volumes."
11 May 2010;business-standard.com:Singapore:Oil prices were firmer in Asian trade today on expectations of improving energy demand, boosted by the EU-IMF eurozone rescue package and Chinese oil consumption, analysts said. New York's main contract, light sweet crude for June delivery, gained 22 cents to $77.02 a barrel. Brent North Sea crude for June rose 23 cents to $80.35. Prices were mainly supported by yesterday's European Union and International Monetary Fund aid package worth 750 billion euros ($one trillion) to stop the Greek debt crisis from spreading. The US Federal Reserve, the European Central Bank and central banks in Japan, Britain, Canada and Switzerland also said they would intervene to ensure that dollar shortages did not occur in the European market. "Market sentiment is still benefiting from the package of measures designed to help support the euro system," David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia, told AFP. The deal helped oil futures to rally $1.69 in New York trade yesterday after falling from a 19-month peak of $87.15 a barrel on May 3 over fears the crisis in Europe could threaten the global economic recovery. Sentiment was also boosted by data showing that China, the world's second largest oil consumer, imported a new record high of crude oil last month. Figures released by the General Administration of Customs Monday said the country imported 21.17 million metric tonnes of crude in April. "Chinese imports of oil remain very strong and that may also be a supporting factor," Moore said.
11 May 2010:timesofindia.indiatimes.com:NEW DELHI: Led by new models and surging economic growth, car sales began the new financial year with a bang as volumes jumped near 40% in April with all major players witnessing rise in demand. According to data released by Society of Indian Automobile Manufacturers (Siam), car sales in the domestic market stood at 1.43 lakh units in April, up 39% from 1.03 lakh units in the same month last year. The buoyant sentiment was evident with 14 of the total 16 carmakers, including Maruti, Hyundai, Tata, Ford and General Motors, all witnessing healthy growth in demand in first month of the year. New models in the small car market triggered the growth with companies becoming aggressive in terms of pricing to woo buyers. Ford's Figo, GM's Beat and Maruti's new WagonR, among others, have kept the momentum going strong. The luxury segment also witnessed good time, with numbers of companies like Mercedes Benz and BMW going up significantly. RC Bhargava, chairman of Maruti Suzuki, said, the car industry was likely to witness healthy growth if the economy continued to grow at a rapid pace. "If the GDP grows by 8-8.5%, the volumes for the car industry should grow by double digits." Sales had grown by 25% last fiscal, though many anaylists expect the growth to be below 20% this fiscal.
Power ministry to work out criteria for gas allocation
11 May 2010;business-standard.com:Mansi Taneja & Jyoti Mukul:New Delhi: The battle for natural gas might cool, with the power ministry deciding to put in place guidelines for allocation of gas to upcoming power plants. Around 200 applications seeking gas linkage for about 250 million standard cubic metres a day are lying with the Ministry of Petroleum and Natural Gas. With no clear policy in place, a need to streamline the process of recommending cases is felt. The policy would assume significance, especially for the Anil Ambani group’s proposed power plant at Dadri in Uttar Pradesh, that had been at the centre of a bitterly fought court battle but is yet to get a commitment on gas from the rival Reliance Industries Ltd or the government. For the Dadri project to be recommended, it would need to fulfill the criteria. The guidelines are expected to be in place this month. The Ministry of Power forwards all applications for gas linkage in a routine manner to the Ministry of Petroleum and Natural Gas. “We have already forwarded about 200 requests for new power plants to the petroleum ministry. These plants are likely to come up in the 12th Five-Year Plan and will have a capacity of 25,000-30,000 Mw,” a senior official in the power ministry told Business Standard. For coal linkage, however, there is a well laid criterion for recommending cases. The ministry is currently in discussion with Central Electricity Authority, the technical regulator for the power sector, to finalise the guidelines. For allotting coal blocks and linkages for captive use, the government gives priority to those that are executed by the state and central public sector units. Second, joint ventures between two states or state and central governments are also given priority. IPP (independent power producer) projects, which have, rate approval by the appropriate tariff commission and projects being developed on the basis of competitive bidding for tariff (include ultra mega power projects) fall next in the line. Prioritisation of projects requiring coal is done through a system wherein 20 points each are given for use of supercritical technology and for projects located at the pit-head or in a state where no major power projects have been planned in the 11th and 12th Plan. Another 10 points are given for the use of sea water. A project gets 50 points if the entire land for it has been acquired. It gets 40 if 75 to 100 per cent land has been acquired, while 30 points are given if 50 to 75 per cent of land has been acquired. In the case of a project acquiring 25 to 50 per cent land, it gets only 20 points.
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