23 Dec 2008;business-standard.com:Danny Goodman:New Delhi: While conventional fuels are derived from crude oil or gas, the hydrogen fuel will use atmospheric air to synthesise pure hydrogen.
Indian Oil Corporation (IOC), the country’s largest oil marketing company by sales, will open the country’s first hydrogen fuel-dispensing station in New Delhi next month. The new-age pump will be set up in Dwarka.
“This is the culmination of a journey undertaken by IOC to diversify the energy mix of the country which ultimately results in energy security in the future,” says RK Malhotra, IOC’s executive director of research and development.
While conventional fossil fuels like petrol, diesel and CNG are derived from raw materials such as crude oil or gas, and mostly imported, the hydrogen fuel to be dispensed at this pump will use atmospheric air to synthesise pure hydrogen, which will be used to fuel vehicles. The process is called “electroliser” technology.
Further, hydrogen-fuelled cell cars emit only water, while CNG vehicles emit noxious oxides that have been a concern to authorities ever since CNG was introduced as an automobile fuel in the capital.
The fuel pump, according to the company, will be set up at a cost of Rs 5 crore, with the Ministry of New and Renewable Energy and the Ministry of Petroleum and Natural Gas funding the project in equal measure.
In 2006, the government unveiled its National Hydrogen Energy Roadmap, outlining an ambitious target of converting one million vehicles to run on hydrogen.
The hydrogen fuel pump will dispense a mix of hydrogen and CNG roughly in the ratio 20:80 to a group of test vehicles comprising three-wheelers and passenger vehicles, mainly drawn from the government’s fleet.
General Motors India has confirmed to Business Standard that its next-generation fuel car under validation in the US — the Equinox, which is a hydrogen-powered fuel cell car — has been sounded out by IOC as a possible test vehicle in India in the coming months.
German auto major BMW also runs a fleet of cars on pure hydrogen across Europe. “But the hydrogen we use is qualitatively different from the one India will experiment with. So we are unable to participate in the rollout,” said the spokesperson of BMW India.
In the initial phase, we plan to target current CNG vehicle-owners in the capital — public transport vehicle operators, goods carriers or passenger car owners because these vehicles can be run on hydrogen fuel mix with a little modification,” says Malhotra. But use of 100 per cent pure hydrogen as auto fuel, Malhotra adds, will require a completely new engine.
Automobile manufacturers like Bajaj Auto, Tata Motors, Ashok Leyland, Eicher Motors and Mahindra & Mahindra have been involved in IOC’s efforts to test hydrogen fuel as a commercially viable fuel option in the country since 2006. In 2005, talks were conducted between IOC and Bangalore-based Reva Electric Car Company (RECC) to fine-tune the hydrogen fuel technology for large-scale commercial use in the country. No progress was made on the joint venture, says RECC.
In terms of mileage efficiency, cost of fuel and emissions, hydrogen is superior to CNG. “It depends on how you use hydrogen fuel. If used in a fuel cell car, the mileage efficiency obtained is twice that of a conventional internal combustion (petrol) engine,” says Chetan Maini, deputy chairman and chief technical officer, RECC.
23 Dec 2008;economictimes.indiatimes.com:Deepshikha Sikarwar:NEW DELHI: Airlines may have to wait for some more time before they get cheaper fuel through a lower sales tax levy, as the government has decided
to put on hold the proposal to grant a declared goods status to aviation turbine fuel (ATF). A government official told ET that Prime Minister’s Office is not in favour of the move for now. Classification of ATF as a “declared good” would have reduced the sales tax on it to a lower uniform rate of 4% in all states against the varying 12-23% at present.
Fuel typically accounts for nearly 50% of the operating costs of airlines. This is much higher than that in other countries, largely because of high sales tax levied by states. Following the PMO directive, the department of revenue has put on hold the proposal to grant declared goods status to ATF through an ordinance.
Declared goods status can be granted only through an amendment in the law, which has to be ratified by the Parliament. However, when Parliament is not is session, the government can bring an ordinance to make a new law or make changes in existing law. The ordinance has to be subsequently approved by the parliament or it lapses. The current session of the Parliament ends on Tuesday.
The department of revenue had done the groundwork for the ordinance, including moving a cabinet note, following a recommendation by the committee of secretaries which was constituted to look into the problems of the airline industry. The proposal was also backed by the civil aviation ministry.
However, the state governments are completely opposed to the idea of a declared goods status to ATF as it brings them significant revenues. They are likely to take up the issue with Prime Minister Manmohan Singh, who is now handling the finance ministry portfolio.
At the last meeting of the empowered committee of state finance ministers, panel chairman Asim Dasgupta had said: “States are opposed to the move (giving declared goods status) as it would cause them substantial loss of revenue. We will be writing to the Prime Minister on the issue asking him not to take any unilateral decision especially now when ATF prices have come down,” he had said.
Airline companies are resisting any reduction in fares despite a fall in fuel prices. They have argued that because of the accumulated losses, it is difficult for them to cut fares. However, if ATF were given a declared goods status they were willing to consider a price cut. Airline companies had made a cumulative loss of about Rs 4,000 crore in 2007-08. A combination of high fuel prices earlier this year and declining traffic is expected to cause the losses to more than double in 2008-09.
Oil import bill higher this fiscal despite lower prices
22 Dec 2008;business-standard.com:New Delhi: The sliding crude oil prices in the past three months have resulted in reduced payouts, but the oil import bill will be higher this fiscal as compared to 2007-08.
According to the Petroleum Planning and Analysis Cell (a wing of the oil ministry), the import bill in terms of value has seen a dramatic downward trend after crude oil started sliding August onwards.
During September, 10.26 million tonne of crude was imported against 10.87 million tonne in August. The quantities were almost same but the payouts for September came down to $7,162 million from $9,409 million in August.
The payouts for importing crude oil during October further came down to $6,086 million. However, the quantity saw an upward trend at 11.36 million tonne in that month.
“Though the crude oil prices have come down in the international market, the oil import bill will not be less than the last financial year as the average crude price so far is still hovering around $100 per barrel.
“Last year, the average price of crude oil was $79.25 a barrel. I don’t think the average price can touch that level this fiscal,” an oil ministry official said.
In 2007-08, India had imported 121.67 million tonne of crude oil and the oil import bill was $67,988 million, whereas this year the country has shelled $60,339 million to import 76.20 million tonne between April and October.
Cairn India makes oil & gas discovery in Rajasthan
22 Dec 2008;business-standard.com:New Delhi: Cairn India - a unit of UK explorer Cairn Energy Plc - has made an oil and gas discovery near its existing field in Rajasthan, the company said in a filing to the Bombay Stock Exchange (BSE).
The discovery is located approximately 1.5 km east of the Raageshwari 1 well in the southern part of the Mangala, Aishwariya Raageshwari and Saraswati development area. The adjacent Raageshwari field is commercial and has an approved field development plan. The well was spudded on November 21 and reached total depth (TD) on November 24.
The open hole drill stem test flowed 40 degree API oil at a stabilised rate of 500 barrels of oil per day plus 0.4 mmscfd gas on 64/64" choke from a 4m Net pay interval in the Upper Thumbli Sand. In addition 1.4m of gas pay was identified in the Akli formation at 1 247.8m MDBRT (11 53.03m TVDSS).
Shares of Cairn India were trading up nearly 5.95 percent at Rs 162 from the rpevious day’s close at the BSE.
Pressure mounts on govt for another fuel price cut
20 Dec 2008;economictimes.indiatimes.com:NEW DELHI: The brief adjournment of Lok Sabha on Friday afternoon, forced by Samajwadi Party MPs, was not in itself unexceptional but their demand
that government cut fuel prices in keeping with a global low in crude rates -- struck a chord with the entire House across the aisles. The SP MPs wanted foreign minister and leader of the House Pranab Mukherjee, who pointedly busied himself with some papers, to respond. While Mukherjee wore a bemused look, the SP MPs, with the obvious support of other sections of the House, clamoured that the government make a statement.
The House met again soon after, but it is clear that political pressure is beginning to mount on the government to go in for another fuel price cut with the international price of crude down. Congress MPs said the demand for lower fuel prices was reasonable and would provide direct relief to a large section of consumers from urbanites to farmers.
Asked whether the demand for a fuel cut could gather steam as polls approached, Congress MPs said they did not feel the government should wait much longer. "We would like a reduction right away. A drop in price of diesel will help bring down transport costs and the price of vegetables. It will help farmers who run pump sets," said an MP.
The government had this month reduced prices of petrol and diesel by Rs 5 and Rs 2 respectively. Earlier, it had hiked petrol and diesel prices by Rs 5 and Rs 3. With crude prices likely to remain low despite OPEC deciding to cut production, the clamour for more price cuts is expected to increase sharply. The oil companies are glad that they are being able to recover their losses, but the political imperatives are likely to prevail.
Oil minister Murli Deora is already being told by MPs that it was time to be a little more "generous" and that he should reduce the price of LPG by Rs 100 as well. This is being seen as a surefire winner with voters as Congress gears for elections. Deora has usually kept quiet when faced with such banter, which is likely to get more serious with the overall economic situation remaining stressed.
Going by the government's own exhortation to departments and state governments to spend more to quicken the economy, a reduction of fuel rates will be seen as another step in the same direction. On the fiscal front, former finance minister P Chidambaram, who has been fielding questions on behalf of Prime Minister Manmohan Singh, has repeatedly told Parliament that in 2008-09, fiscal deficit will not be treated as sacrosanct.
20 Dec 2008;business-standard.com:Washington: General Motors Corp and Chrysler LLC will get $13.4 billion in initial government loans to keep operating in exchange for substantially restructuring their businesses under a rescue plan announced by President George W Bush.
The money will be drawn from the Troubled Asset Relief Programmeme set up to bail out financial institutions. An additional $4 billion would be provided in February provided the second half of TARP’s authorised $700 billion is released by Congress. The funds would allow GM and Chrysler to keep operating until March.
Winning the assistance is a reprieve for GM, the biggest US automaker, and third largest Chrysler after they said they would run out of operating funds as soon as this month. Bush is stepping in after Senate Republicans’ refusal last week to take up a House-approved rescue raised the prospect that the companies would fail, costing millions of jobs.
“These are not ordinary circumstances,” Bush said at the White House. “In the midst of a financial crisis and a recession, allowing the US auto industry to collapse is not a responsible course of action.”
