23 June 2009;business-standard.com:Swaraj Baggonkar:Mumbai: The marketing battle between Maruti Suzuki and Hyundai Motor India is refusing to die down. The two leading domestic car manufacturing companies are at loggerheads yet again after Maruti Suzuki, in an apparent reply to Hyundai’s earlier negative marketing campaign against its model, Ritz, launched a scathing attack on the Korean company in an advertisement showing Hyundai’s best-selling compact car, the i10, in poor light. According to Hyundai, Maruti Suzuki — which is India’s leading car maker with a market share of almost 50 per cent — made unfair comparisons between its A-star and the i10 in a newspaper advertisement (pictured) appearing in two of Mumbai’s tabloids on Saturday. The comparisons between the two models were made on eight different aspects, including mileage, features, security, control, safety, performance, technology and looks. According to Maruti Suzuki, the i10 ‘failed’ to pass the parameters set by A-star. When contacted, a spokesperson at Hyundai said: “This is a deliberate attempt by Maruti to make our models appear in bad light when, in fact, they are doing exceedingly well. There is also a big error in communication regarding the mileage they have quoted for the i10.” Maruti has sourced the mileage figure for the A-star from the Automotive Research Association of India (ARAI), which is at 19.6 km/litre whereas, for the i10 the figure has been sourced from an automotive magazine, which pegs it at just 12 km/litre. “If you are taking the ARAI figure as the benchmark for fuel efficiency, then you have to use it for our model as well. The i10 delivers a much better fuel economy than the quoted figure. Besides, our model’s (i10’s) monthly sales are three times more than their A-star,” added the spokesperson. Maruti officials were not available for comments. A little over two weeks ago, Hyundai had launched a critical marketing drive against Maruti’s newly launched Ritz, using findings and comments made by European auto magazines and auto experts. A tougher demand outlook for the next couple of months following the onset of the monsoon has forced many auto companies to increase their discounting schemes on car models in order to lure buyers. This has led to a rise in the battle for market share amongst car models like the A-star and the i10, which compete in the same B+ segment. The i10 (1.1-litre) is priced at Rs 3.46 lakh, while the A-star is priced at Rs 3.58 lakh (ex-showroom Mumbai, both base variants). Both models have near-identical power of 67 BHp, although the i10’s engine is marginally bigger than the A-star’s. This is not the first time the two companies are engaged in a catfight over marketing their own car lines. Less than three years earlier, Hyundai had approached the Monopolies and Restrictive Trade Practices Commission (MRTPC) after Maruti Suzuki had used the findings of a disputed market study done by TNS/TSC in newspaper advertisements. The MRTPC bench, then headed by Justice O P Dwivedi, subsequently asked both the auto giants to avoid targeting each other in advertisements. Prior to this, Maruti had strongly objected to Hyundai’s advertising brochure, labelled as “Xing ahead of the Swift” and had also asked for an apology, terming the campaign as “false, misleading and deceptive”. Maruti then (in 2005) had introduced the best-selling Swift in the Indian market, while Hyundai had launched a face-lifted Santro, called Santro Xing, prior to that.
Govt may hike petrol price by Rs 2 a litre, diesel by Re 1
22 June 2009;timesofindia.indiatimes.com:NEW DELHI: Government may increase petrol price by Rs 2 a litre and diesel by Re 1 per litre unless excise duty on the two fuels is cut to neutralise the impact of firming international oil rates. State fuel retailers Indian Oil, Hindustan Petroleum and Bharat Petroleum lost Rs 135 crore per day on sale of petrol, diesel, LPG and kerosene and their annual revenue loss for current fiscal is estimated to be at Rs 38,700 crore. The basket of crude oil India imports has averaged $70.49 per barrel in the second fortnight of June against the May average of $58, sending alarm bells ringing, a petroleum ministry official said. "We have to act to save our PSU," he said. "The burden (of rising global oil prices) has to be shared equally between the companies, the government and consumers." PSUs lose Rs 2.96 a litre on diesel and Rs 6.08 per litre on petrol. "One-third of this or Rs 2 per litre on petrol and Re 1 on diesel can be passed on to consumers," he said. The rest of the losses would be covered by issue of government bonds to the retailers and subsidy sharing by upstream firms like ONGC. "If the finance minister Pranab Mukhejree cuts excise duty on the two fuels, consumers can be spared from price hike," he said. Petrol attracts an excise duty of Rs 11.35 per litre and diesel Rs 1.60 a litre. Besides, Rs 2 a litre road cess is levied on the two fuels.
22 June 2009;economictimes.indiatimes.com:Rajeev Jayaswal:NEW DELHI: Oil and gas producers could be forced to pay royalties to the government on the basis of sale prices in the future rather than the present system of ‘wellhead value’, threatening profits of oil companies such as ONGC, Reliance Industries and Cairn India. The new method, which is now being examined by the oil ministry, could represent a fundamental overhaul of the system of calculating royalties, and boost revenues for the cash-strapped exchequer, weighed down by mounting deficits. Government officials said the directorate general of hydrocarbons (DGH) was likely to move a proposal suggesting the new way to calculate royalty payments. “It is not yet final. We may opt for calculating royalty on the basis of sale price for either oil, or gas, or both,” said an official in the oil ministry, who asked not to be identified. Companies were sure to strongly resist any such move, an oil sector consultant said. “Any attempt to change this would lead to litigation,” he said, requesting anonymity. Jettisoning the wellhead value system, which only takes into account the total cost of production and does not include transportation costs, could help the government make more by way of royalties from oil and gas companies for the natural resource, as the wellhead prices of oil and gas are almost always less than their actual sale prices. Current royalty rates are 5% of the wellhead value in case of offshore production for the first seven years, and 10%, thereafter, and 20% for onshore production. The lower rates offshore reflect the higher risks in extracting oil and gas.
Oil falls to near $69 as optimism on economy wanes
22 June 2009:economictimes.indiatimes.com:SINGAPORE: Oil prices fell to near $69 a barrel on Monday in Asia on investor concerns over a weak US economy. Benchmark crude for July delivery fell 38 cents to $69.17 a barrel by late morning Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, it dropped $1.82 to settle at $69.55. The July contract expires later on Monday. The August contract slid 44 cents to $69.57. Crude rose to an eight-month intraday high of $73.23 a barrel earlier this month on investor optimism that the U.S. economy, suffering through its worst recession in decades, may grow by the end of the year. However, recent economic data has been mixed and reflects an economy still struggling to right itself. The Dow Jones industrial average fell 3 percent last week. ``Oil may have peaked in the short-term,'' said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. ``The market is overripe for a correction. Eventually the laws of supply and demand will re-exert themselves.'' This week, traders will be looking for signals on consumer demand in a Commerce Department report on May personal spending, which has fallen for eight of the past 10 months. The University of Michigan also reports on June consumer sentiment. On Sunday, militants of the Movement for the Emancipation of the Niger Delta said they attacked two pipelines belonging to oil giant Royal Dutch Shell in south Nigeria. Violence has been escalating in the region as the military intensifies operations to flush out rebels battling for a larger share of the country's oil revenues. ``The recent attacks haven't had much of an impact on oil because there's a lot of global spare production capacity,'' Shum said. ``Oil is everywhere.'' In other Nymex trading, gasoline for July delivery was steady at $1.92 a gallon and heating oil fell 0.50 cent to $1.78. Natural gas for July delivery slid 4.4 cents to $3.99 per 1,000 cubic feet. In London, Brent prices fell 29 cents to $68.90 a barrel on the ICE Futures exchange.
19 June 2009;economictimes.indiatimes.com:SINGAPORE: Oil prices lingered above 71 dollars a barrel in Asian trade Friday spurred by hopes that the worst is over for the ailing global economy, analysts said. New York's main futures contract, light sweet crude for delivery in July, gained nine cents to 71.46 dollars a barrel. Brent North Sea crude for August delivery advanced 15 cents to 71.21 dollars. "I think the general mood is that we're past the worst of the downturn," said Mark Pervan, a senior commodities analyst with ANZ Bank in Melbourne. "It continues to be a pre-emptive market in a sense that they are pricing on positive news." Positive US data and stronger energy demand energised the market, analysts said. The US Department of Energy reported a sharper-than-expected fall in crude inventories last week. On Thursday, a US business research firm said the index of leading economic indicators, a measure of conditions in the coming months, increased 1.2 per cent in May from the previous month, beating market expectations. The index had been on a downward trend since hitting a peak in July 2007, the Conference Board said. Developments in the recession-hit US economy are closely monitored because it is the biggest in the world and is a major buyer of the world's exports. Pervan said crude prices were also closely pegged to the value of the US dollar, which has been under pressure. "I think there's still a high correlation with the dollar... instead of on market fundamentals like supply and demand," he said. A weaker US currency makes dollar-priced crude cheaper for buyers holding stronger currencies. That tends to stimulate demand and push the market higher. After plunging from record highs above 147 dollars last July on supply concerns, oil prices touched multi-year lows of around 32 dollars in December as the economic slowdown crushed demand for energy but they have slowly clawed back since.
19 June 2009;business-standard.com:Mumbai:State-run Air India and budget carrier SpiceJet today increased their fuel surcharge by Rs 400. The decision comes just a day after a similar move was announced by private domestic airlines Jet Airways and Kingfisher Airlines. An Air India spokesperson said: “We are increasing the fuel surcharge by Rs 400 effective from June 19.” He added the higher fares were for both long and short haul routes on the domestic sector. Earlier in the day, low-cost carrier SpiceJet also raised its fuel surcharge on tickets by Rs 400 following a rise in jet fuel prices. “We have raised the fuel surcharge across all sectors by Rs 400, effective immediately,” SpiceJet Chief Commercial Officer Samyukta Sridharan said. On Wednesday, Jet Airways and Kingfisher Airlines had raised fares on domestic sectors by a similar amount after aviation turbine fuel (ATF) prices were increased by more than 12 per cent by state-run oil firms a day earlier. The surcharge, which Jet Airways increased to Rs 3,400 a ticket, was for all tickets of Jet as well as its two wholly-owned low-fare subsidiaries, JetLite and Jet Airways Konnect. A company statement issued by Jet Airways had pointed out that the increase was necessitated by “...the sharp increase in ATF prices by 33 per cent since March 2009.
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