CNG kit makers up production on expected surge in demand
05 July 2009;business-standard.com:Danny Goodman/New Delhi: Manufacturers of compressed natural gas (CNG) kits are stepping up production to meet the expected surge in demand in the coming months. The reason is a notification by the Delhi government that light commercial vehicles (LCVs), both three-wheelers and sub-one tonne four wheelers, have to convert to CNG by September 30 to ply in the city. According to industry estimates, there are about 25,000 LCVs, both three-wheelers and sub-one tonne four wheelers, that run on diesel in the capital. These will have to shift to CNG by September 30, failing which they will be prevented from entering the capital. Those with national transport permits need not comply with this. “Volume-wise, this could be the single-largest order for CNG kits we have seen so far,” said Nirmal K Minda, CMD of Minda Industries Ltd, the largest supplier of CNG kits to original equipment manufaturers (OEMs) or vehicle manufacturers. The last mass conversion of vehicles to CNG was in 2001 when, following a Supreme Court order, around 5,000 diesel-run buses were retro-fitted with CNG kits. It costs about Rs 1.5 lakh to convert a diesel LCV to CNG. So, the total business for manufacturers of CNG kits due to the Delhi government’s directive is estimated at around Rs 375 crore in the coming months. However, an industry executive said only 200 vehicles had complied with the first deadline so far. “In case of buses, only 50 per cent of the 10,000-strong fleet converted. The rest were sold to operators outside the city. Worse, some bus operators quit the business since the conversion proved uneconomical,” said SP Singh, senior fellow of Indian Foundation of Transport Research and Training, or IFTRT. “We expect 15,000 LCVs to convert. The rest will be sold to truck operators outside the city,”said an executive from DD Industries, which supplies CNG kits exclusively for the after sales market. “The biggest hurdle to CNG conversion is the perception of the fuel’s availability. There have always been long queues. The CNG infrastructure in the capital has to improve,” said Mukesh Garg, proprietor of New Delhi-based Ecogas. Despite these difficulties, industry executives say there are obvious benefits from converting to CNG fuel. Apart from the reduced pollution, CNG-fuelled vehicles are less costly to maintain. “Factoring in the cost of CNG, which is about Rs 9 cheaper than diesel, and the cost of maintenance, which is about 50 per cent less than for a diesel vehicle, CNG is a winner,” said the executive from DD Industries. Manufacturers and retro-fitters of CNG kits are hopeful of posting a robust growth in the coming months. “Last year, on a low base, we grew by 20 per cent. This year, with more car companies like Maruti Suzuki preparing to roll out models with factory-fitted CNG kits, we expect to grow 100 per cent,” said Minda.
03 July 2009;hindustantimes.com:Anupama Airy:New Delhi: In what could bring down consumer prices of petrol and diesel by up to Re 1 a litre, Petroleum Minister Murli Deora has asked all chief ministers to consider reducing sales tax rates on them. Current VAT (value added tax) rates applicable on petrol and diesel in states range anywhere between 10 and 33 per cent and depending on the level of reduction of taxes by states, prices could be reduced by up to Re 1 a litre on petrol and 50 paise a litre on diesel. The impact of sales tax levied on petrol and diesel can be seen from the fact that out of the Rs 4 per litre increase in petrol price, only Rs 3.33 per litre goes into the kitty of the oil companies while the rest goes as sales tax to the state governments. Similarly, against the retail price increase of Rs 2 per litre in diesel, oil firms would get only Rs.1.78/litre and the balance would go to the states. States levying higher sales tax like Andhra, Tamil Nadu, West Bengal, Maharashtra, MP, Rajasthan and Kerala can easily rationalise taxes to pass on the benefit to consumers. Deora told HT that he on June 23 wrote to all CMs, asking them to consider reducing taxes on petrol and diesel, especially in the wake of rising international oil prices, so that the impact of high crude prices on the consuming public can be capped. A similar communication, he said, was sent to the West Bengal finance minister, who is also chairman of the Empowered Committee of State Finance Ministers.
01 July 2009;dailypioneer.com:New Delhi:Days before the general budget, the government on Wednesday increased petrol and diesel prices by Rs four and Rs two a litre respectively effective midnight tonight, but spared kerosene and domestic cooking gas from a hike. "The hike was necessitated because of rising international crude oil prices which have doubled to USD 70 a barrel since December," Petroleum Minister Murli Deora told reporters here. The issue was not taken to the Cabinet, as is done generally, but Deora consulted party leadership and Prime Minister Manmohan Singh to decide on the hike. The decision would help garner Rs 13,000 crore this fiscal, although the oil companies were projecting a loss of Rs 39,000 crore before the hike. The decision comes ahead of the July 6 budget day. Parliament's budget session is to begin tomorrow and clearly the government wanted to take a decision before that.
01 July 2009;economictimes.indiatimes.com:Chanchal Pal Chauhan:NEW DELHI: Declining interest rates and easy availability of credit have increased the number of cars sold through loans by 15% in the past six Things to remember while purchasing a vehicle months. Around 70% of new cars sold now are financed through loans compared with 55% a year ago when loans became unattractive due to high interest rates and a credit crunch. The major push has come from PSU banks such as State Bank of India, the country’s largest bank, which has emerged as the second-largest disburser in the car finance business after HDFC Bank. PSU banks are offering car loans at 10% while private banks like HDFC, ICICI and Kotak Mahindra are offering them at 11.5-13%. Hyundai Motor India senior vice-president (sales & marketing) Arvind Saxena said, “It’s a big positive development. Easier finance will expand the car market and generate fresh demand. We are expecting healthy increase in car sales in the next few months.” In 2007, when the interest rate were in single digits, over 80% cars sold were financed and led to rapid rowth in car sales. Bankers say customers are milking the rapid fall in interest rates over the past six months and making fewer cash down purchases. “Though India was not impacted by the global economic downturn, the general improvement in sentiment has boosted the retail finance market. The low interest rate has prompted customers to go for loans instead of cash deals,” said HDFC Bank executive vice-president for auto loans, Ashok Khanna. According to five bankers and financiers ET spoke with, the percentage of cars sold on loans is likely to go back to the peak 80% after the Budget. “We have eased lending norms and almost doubled the dispersal funds for auto. There has been a huge rush of customers opting for the 10% fixed rate on auto loan,’’ a senior executive of SBI Bank said, requesting anonymity. This change comes almost a year after the government eased lending norms and pumped liquidity in the market to stimulate demand. Car sales grew 3.29% to 2.16 lakh units in April-May period over last year and the growth is likely to increase with several banks likely to drop interest rates in the near future.
30 June 2009;business-standard.com:New Delhi: For the fourth time in two months, state-run oil firms today hiked jet fuel or aviation turbine fuel (ATF) price by more than 6 per cent on firming international oil prices. Indian Oil, Bharat Petroleum and Hindustan Petroleum raised ATF price by Rs 2,306 to Rs 38,558 per kilolitre in Delhi effective midnight tonight, an IOC official said. The hike comes on back of over 12 per cent hike on June 15. ATF price on that day were raised by Rs 3,949 to Rs 36,252 per kilolitre in Delhi. International crude oil prices have firmed to a seven-month high of $72 per barrel on hopes of demand revival in US. The three state-run retailers had from June 1 raised jet fuel rate by an average of Rs 108 per kl, which came on the back of a 1.8 per cent hike in rates on May 16. In Mumbai, home to the nation's busiest airport, the rate will go up from Rs 37,367 per kl to Rs 39,789 per kl. The rise in ATF price, which constitutes 40 per cent of airlines' operating cost, may further put pressure on cash-strapped domestic carriers. No comments from any of the leading airlines were immediately available on the latest price hike. Jet fuel in Kolkata will be dearer at Rs 46,711 per kl from Rs 44,289 per kl, while in Chennai the price has been raised by Rs 2,500 per kl to Rs 42,524 per kl. ATF prices had peaked to Rs 71,028.26 per kl (in Delhi) in August last year on international crude prices touching a historic high of $147 a barrel. But subsequently the rates had come down, slashed every month till October and twice a month from November. The three firms, which revise jet fuel rate every fortnight based on trends in international markets, had on April 16 increased ATF rate by about 6.7 per cent. This was followed by a marginal reduction in rates by one per cent on May 1.
