21 Jan 2012;timesofindia.indiatimes.com:NEW DELHI: The UPA government is set to carve the biggest pork barrel in recent times by changing the marketing guidelines for state-run fuel retailers to reserve 27% of new petrol pumps and cooking gas dealerships for OBCs after the model poll code gets over. As first reported by TOI on October 19, the oil ministry has forced state-run fuel retailers to roll out 11,600 new petrol pumps, a bulk of which would be in the poll-bound states. The ministry is changing the guidelines to extract the maximum benefit of that move by bringing in reservation for a big chunk of voters. The initiative has been stuck because the model code of conduct bars government from announcing any popular initiative to deny any ruling dispensation from influencing voters. The oil ministry's corridors in New Delhi's Shastri Bhavan are expected to see a rush of favour-seekers once the code ends in early March, harking back to days when quotas and VIP references held key to a cooking gas connection or a petrol pump. The present guidelines reserve 25% of new pumps for SC and ST applicants. The new guidelines would see that reduced to 22.5%, while 27% dealerships would be reserved for OBCs. The remaining 50% of the pumps would be for general category candidates. About 33% of the locations in each category are reserved for women belonging to that particular category. In addition, physically handicapped, former/martyred paramilitary/police personnel, freedom fighters and outstanding sportspersons would also get quota in each of the three categories - SC/ST, OBC and general. Physically-handicapped persons get 5% reservation, while paramilitary/police/government personnel and defence personnel are each allotted 8% of new petrol pumps. Another 2% reservation is provided for freedom fighters and outstanding sportspersons, taking the overall reservation to 50%.
Petrol price decontrol seen only in vapour outline
20 Jan 2012;business-standard.com:Ajay Modi:New Delhi: Despite the legal removal of government control on the price of petrol since June 2010, state oil marketing companies (OMCs) continue to lose sharply on its retail sale. A hit of about Rs 20 crore daily for the three OMCs, says the finance director of one of these. In 2010-11, the first year of the ostensible decontrol, the three OMCs (Indian Oil, Bharat Petroleum and Hindustan Petroleum) together lost Rs 2,200 crore on petrol sale. In the first six months of 2011-12, they have lost another Rs 2,500 crore. The full year should see a loss of at least Rs 4,500 crore. The reason is political. The OMCs are all government-owned and the state’s heavy hand is clear in the way any change in pricing is effected. Or, to be more accurately, not effected. Even parties which are part of the ruling coalition, the Trinamool Congress being one, have not only attacked the government on even the increases allowed, but also threatened to withdraw support. In January last year, despite a surge in the price of imported crude oil, the OMCs were made to put their price rise plans on hold, due to four states having scheduled Assembly polls later in the year. At the start of the current financial year, last April, when the OMCs were losing almost Rs 7 on every litre of petrol they sold, Indian Oil chairman R S Butola said they’d all “consciously” decided not to revise the price to keep “the environment happy” in view of rising inflation. By May, the loss of retailed petrol had reached Rs 10.50 a litre. Price rises were subsequently allowed, to only partially offset the losses — they precipitated a storm of political criticism. This month, price rise plans of OMCs have again been put on hold, with four states going to the polls in due course. The fortnightly review of prices has been skipped twice, although the OMCs current loss on petrol is estimated to have touched as much as Rs 1.50 for each litre sold. These companies also lose heavily on the three petro products which are regulated — diesel, kerosene and domestic cooking gas. However, the losses here are supposed to be compensated in some form, such as a mix of cash reimbursal from the government and discounts on purchase from upstream refiners such as Oil India and Oil and Natural Gas Corporation. But, any loss on petrol is to be borne squarely by the OMCs. There are two private retailers, Essar and Reliance, and they’re affected as the government companies are selling at a subsidised rate. The private competitors’ initial excitement, followed by rapid re-opening of closed outlets and expansion plans, is now quite subdued. Is petrol decontrol, then, a sham? Experts say it is still better than the earlier situation. “There is a semblance of decontrol but we are still away from real decontrol, as the government continues to have a say in pricing. But we cannot say that the pre-decontrol era was better. This is a step in the right direction but we should strengthen it,” said Deepak Mahurkar, associate director, PricewaterhouseCoopers.
20 Jan 2012;business-standard.com:Mumbai: The rupee erased early gains on Friday hurt by dollar buying from oil refiners and importers, but losses in the greenback versus other majors kept a lid on further weakness. Oil is India's biggest import and refiners are the largest buyers of dollars in the domestic currency market with their demand tending to peak towards month-end when they make payments. "Spot moves are fairly stable but forwards are moving continuously higher everyday due to customer interests and tight liquidity," said Paresh Nayar, head of fixed income and forex trading at First Rand Bank. One-year forward premium was at 294.25 points compared with 291 points at previous close. At 10:50 a.m., the rupee was at 50.28/50.29 to the dollar, after strengthening to 50.16 in early trades. It closed at 50.25/26 on Thursday. The rupee has risen 2.5% against the dollar so far this week. If it holds those gains, the currency will have its largest weekly gain since the last week of October, according to Thomson Reuters data. Recent measures by the Reserve Bank of India to curb corporate and interbank speculation and opening up the dollar supplies from non-resident Indian and foreign investors have accelerated dollar inflows and will lend support to the currency, traders said. Robust gains in Indian shares, with the country's No. 3 software services exporter, rallying 3.5% after its quarter earnings almost met market expectations, will keep hopes of inflows intact, added traders. Gains in Asian shares and a firmer euro after successful bond sales in Spain and France will boost risk sentiment and aid the rupee, traders said. Investors turned sharply bullish on most emerging Asian currencies in the last two weeks, especially the Indian rupee and the Indonesian rupiah, a Reuters poll showed on Thursday. One-month offshore non-deliverable forward contracts were being quoted at 50.27, indicating some weakness in the short term in the onshore spot rate. In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all were around 50.40 on total volume of $771 million.
General Motors reclaims world's biggest carmaker title as Toyota skids
19 Jan 2012;economictimes.indiatimes.com:PARIS: General Motors reclaimed its title as the world's biggest automaker on Thursday, successfully emerging from its 2009 bankruptcy woes to overtake German giant Volkswagen and Japanese Toyota in the race to the top. The US giant sold 9.03 million vehicles globally in 2011, up 7.6 percent from a year ago, as it cashed in on a recovery in the north American market which delivered a 11.4 percent sales jump to 2.9 million. The carmaker also posted strong results elsewhere, with European sales up 4.4 percent and 3.9 percent in South America. Its best-selling marque Chevrolet posted record sales of 4.75 million units, making up almost half of the global total. The results marked GM's sharp U-turn from near demise in 2008, when the global financial crisis forced it to turn to the US government for a bailout. In June 2009, it filed for bankruptcy which allowed it to change labour contracts and dump brands, dealers, workers and plants in the process. It emerged from bankruptcy much leaner and more focused, and in November returned to the stock exchange in a share offering that raised a massive $23.1 billion, helping it to pay back half of its government debt. As GM's fate began to change for the better, its Japanese rival Toyota, which had roared ahead during GM's difficult years to take top spot among the world's biggest automakers, began to see woes piling up. In the last two years, the Japanese giant suffered the double whammy of massive vehicle recalls and then last March's devastating earthquake and tsunami in its home country. Reputed for its well-made family sedans, Toyota's reputation took a dent in 2010 when it was forced to recall more than nine million cars in the world over diverse technical problems, including defective braking systems. The year 2011 brough an earthquake and tsunami in Japan that badly hindered production for several months in the archipelago and abroad. Floods in Thailand at year-end added to its problems, as factories in its key southeast Asian manufacturing base were disrupted. As a result, its 2011 sales fell to 7.0 million units, down 6.0 percent, according to provisional data released at the end of December. If confirmed, the firm would be relegated to third place, behind Volkswagen. The German giant which owns brands including Audi, Seat, Skoda, Bentley, Bugatti and Lamborghini has said it sold 8.15 million vehicles during the year, up 14 percent from 2010. It is aiming to become the biggest automaker by 2018. But Toyota, which also owns the luxury brand Lexus, is planning to give both its rivals a run for their money, with sales targets of 8.488 million vehicles in 2012 and 9.0 million by 2013.
19 Jan 2012;business-standard.com:Ahmedabad/Mumbai: Following the Supreme Court’s rejection of Essar Oil’s 125 per cent sales tax deferment benefit claim on its investment in the Vadinar (Gujarat) refinery project, the company said it expected to file a review petition. “It needs to be clarified that the scheme was not for sales tax exemption but was only for a deferment of payment of sales tax,” the company said on Wednesday, while indicating a recourse to review. It had earlier got a favourable high court order. Essar Oil shares slumped 11.53 per cent, or Rs 6.70, to Rs 51.40 on the Bombay Stock Exchange (BSE) on Tuesday, against a Sensex which fell 0.09 per cent . Essar Ports fell 8.18 per cent to Rs 58.35, while Essar Shipping declined 1.96 per cent to Rs 27.45. While the quantity of sales tax deferment benefit was around Rs 9,100 crore as estimated by the company, till December 31, 2011, Essar availed Rs 6,308 crore. Of this, it had already assigned Rs 1,800 crore to third parties for payment. “We would pay back the entire amount through internal reserves. There is no plan to borrow to pay off on this commitment. In any case, this was to be paid off by 2013-14,” said L K Gupta, managing director, in a conference call. “The sales tax deferment benefit was a loan repayable on the earlier of 2021/22 or on exhaustion of the full eligible amount (which the company expects to be FY 2013-14) in six equal annual instalments,” Essar Oil said. It added the sales tax deferment liability assigned as of December 31 amounted to Rs 1,800 crore, “repayable in accordance with the terms of the agreement”. “We do not have any clue on what the schedule will be of whole repayment of this amount. We will talk to the (Gujarat) government and have mutually agreeable terms on this issue,” said V Ashok, the Essar Group’s chief financial officer, during the conference call. Meanwhile, the company is also seeking to exit its Corporate Debt Restru-cturing (CDR) scheme, for which it is already in discussion with lenders. “The process of exiting CDR is expected to be completed shortly. As regard the Master Restructuring Agreement, (we are) required to obtain approval of deferment of the sales tax by March 31, 2012, and repay the same. We are discussing the developments with the lenders and there is no Event of Default under the financing agreements,” it stated.
19 Jan 2012;business-standard.com:Mumbai: Maruti Suzuki, the country’s biggest car maker, will buy 100,000 diesel engines a year for the next three years from the joint venture company of Fiat and Tata Motors. Fiat and Suzuki Motor Corporation of Japan, Maruti’s parent, have reached an agreement for the supply of Fiat’s 1.3-litre, multi-jet, Bharat-IV diesel engine, to be produced under licence by Fiat India Automobiles (FIAL). FIAL is a 50:50 joint venture between Italy’s Fiat Group Automobile SpA and Tata Motors, India’s biggest vehicle manufacturer. The JV company, based in Pune, owns the Rs 4,500-crore engine and transmission plant located at Ranjangaon, near Pune. The supplies will commence from this month till 2015. “The engine will be installed on Suzuki-branded vehicles produced in India by Maruti Suzuki India for the local market. The production of the engines will start in the fourth week of January at FIAL’s Ranjangaon plant,” stated a release by Fiat India. MSIL’s plan to buy the engines from an alien company is driven by excessive demand for its diesel models such as the Swift, DZire, SX4 and Ritz. The limited supply of engines forced Maruti to restrict the diesel offering to only four models. New models such as the multi-purpose Ertiga will have a diesel engine option. All of Maruti’s current line of diesel models use the same 1.3-litre multi-jet engine. These supply volumes from Fiat will be in addition to the same engine already licensed by Fiat and manufactured by Suzuki Powertrain India.
Petrolstop is a division of Car Fuel Info Solutions, LLC Petrolstop.com is a registered trademark owned by Car Fuel info Solutions, LLC Website Design by Onazari Technical Solutions
