01 Feb 2012;business-standard.com:New Delhi: Protests by coal consumers, led by the power industry, against the government move to switch to a new pricing methodology have forced state-owned miner Coal India Ltd (CIL) to roll back the price hike under the Gross Calorific Value (GCV)-based system effected on January 1. Terming the CIL decision to raise rates an “error”, coal minister Sriprakash Jaiswal made it clear the rollback had more to do with the fear of passing on the increase to power tariffs than bringing a more efficient grading system. Announcing the rollback, he said, “Our country is not in a position to increase power prices.” While the rollback has come as a breather for consumers, as it makes the switch to GCV revenue-neutral, it has eroded Coal India’s cushion against a Rs 6,500-crore impact of a wage hike for its 3,63,000 workers agreed on Tuesday. The new grading system that led to an average 12.5 per cent increase in prices would have given additional revenue of Rs 6,250 crore to the miner annually. “The additional revenue that could have come from the increase in prices will not be available now. But, this is not a cause for worry, as the new pricing system will be reviewed after three months and a clear picture would emerge then,” CIL Chairman N C Jha told Business Standard. Jha also told a media gathering that some CIL subsidiaries could suffer a revenue loss as a result of the rollback but the exercise would remain revenue-neutral for the company as a whole. CIL was asked to review the new system by January 31 after a meeting of the standing committee on coal and steel on January 20. "When we made a switch to the GCV system, there was perhaps an error by Coal India and coal prices went up," the minister said on Tuesday. CIL’s share price on the Bombay Stock Exchange closed at Rs 325.6, down 2.9 per cent from the previous close. The miner had decided to do away with the earlier system of pricing based on Useful Heat Value (UHV) a month back in an attempt to align pricing with global practices. Power generator NTPC Ltd had recently said the GCV system had pushed up input costs 40 per cent. The coal ministry rejected the claim, arguing the switch was not a cover-up for profiteering. The move was a response to complaints of inferior quality supply from consumers, according to the ministry. The power industry had raised the price hike issue in meetings with the Prime Minister and the coal minister on January 18. Jaiswal had assured there would be no “irrational increase in prices”. Jha said a final call on price revision, if required in view of the wage hike, would be taken after studying in March the impact of the GCV review on CIL.
31 Jan 2012;business-standard.com: French automaker PSA Peugeot Citroen, fighting falling sales in its home market, is reviewing its India plans and has started efforts to shut down its office in Mumbai, a business newspaper reported on Tuesday, citing a person close to the development. PSA said in September it was investing around 650 million euros to build a new manufacturing plant in India to further strengthen its business in this fast-growing market. Europe's second largest car maker after Volkswagen said this month the number of cars it sold last year fell 1.5% to 3.5 million as expansion in emerging markets failed to offset a decline in its market share in Europe. The newspaper said that the carmaker is working out strategies for "frugal spending" on the India project. A PSA spokesman in Paris did not immediately respond to an email from Reuters for comment.
Honda Motor plans diesel variant of Brio to increase market share
31 Jan 2012;economictimes.indiatimes.com:Chanchal Pal Chauhan:NEW DELHI: Honda Motor could introduce the diesel variant of its high-selling compact car 'Brio' in India this year, bringing forward plans to tap a car market skewed away from costly petrol. The carmaker is testing its newly developed diesel technology, common rail i-DTEC, on the Brio and could introduce it in a 1.2-litre version. The diesel variants of its City sedan and Jazz hatchback, carrying larger engines, will be introduced later. The company had earlier planned to introduce diesel vehicles in 2013. "Honda is committed to bringing its diesel technology to key markets like India. And to ensure that Honda diesel is best suited to local conditions and offers optimum performance levels, Honda is conducting stringent tests at its R&D centres across several locations," a company spokesperson said in an email response. Honda, which operates in India through its JV Honda Siel Cars India, is keen on regaining market share from rivals Volkswagen and Toyota whose diesel cars account for a large chunk of their sales. The Japanese automaker, which entered India in 1995, has seen sales fall 27% in the first nine months of the current fiscal, largely because it was unable to introduce any diesel variants, which have become popular in India because of the rising cost of petrol. The carmaker's output in India was also affected by shortage of components after last year's tsunami in Japan and flash floods in Thailand, which led to a 36% loss in production, or 27,939 units, in the April-December period. The i-DTEC engine, nicknamed "Earth Dreams Technology" will first be used in the new Civic sedan in Europe this year. According to some people working closely with the company, "its application for other models and markets is likely to come in the shape of Brio compact car for India in the initial phase". Diesel cars, which registered a 26% rise in sales in the first nine months of the current fiscal, accounted for about 60% of the passenger vehicles sold in the country. During the same period, sale of petrol cars dipped 18%. According to industry executives, diesel cars account for over 80% of sales in models like Maruti Swift and Hyundai Verna, where both fuel options are available.
31 Jan 2012;business-standard.com:New Delhi: With completion of its 2,400-Mw gas-based power project at Samalkot in Andhra Pradesh, Reliance Power has made a case for gas allocation with the government. Its chairman, Anil Ambani, has written to Prime Minister Manmohan Singh seeking allocation for 9.6 million standard cubic metres a day (mscmd). He has also sought that gas allocated to non-priority sector users be reallocated to the priority sectors of power and fertilisers. In his letter, Ambani has said while the ministry of power has recommended gas allocation of 9.6 mscmd for the Samalkot project, the request is pending allocation since an empowered group of ministers (EGoM) is yet to meet. “It has been over 18 months since the last meeting of the EGoM in July 2010 and many projects such as Samalkot are awaiting gas allocation for their commissioning activities,” said the letter sent recently. Stating that the Supreme Court in its ruling on the Reliance Industries Ltd (RIL) versus Reliance Natural Resources Ltd (RNRL) case in 2010, had ruled that the group’s demand for gas allocation should be considered in line with government policy, Ambani said, “We are now ready for the plant commissioning...We fulfill all requirements for gas allocation as outlined by the gas utilisation policy.” RNRL now stands merged with RPower. Ambani had led a high-pitched war of words with both the government and RIL for getting natural gas. The Samalkot project has a small gas allocation from RIL’s KG-D6 block but with the capacity enhancement, the plant requires more gas. The plant expansion has $600 million funding from the US Exim Bank. The chairman of the ADA Group has also said that in adherence to the principle of equity, all available gas for the power sector be equitably provided to all projects on an equal plant load factor basis, so that they can achieve minimum viability until supplies ram-up.
India won't scale down its petroleum imports from Iran: FM
30 Jan 2012;deccanherald.com:Chicago: "It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them," Mukherjee told reporters here. Speaking at the end of a two-day visit aimed at wooing US investment, Mukherjee yesterday said: "Some other countries, Saudi Arabia, Nigeria, the other Gulf countries they also contribute but Iran contributes substantially." "We (India) imports 110 million tonnes of crude per year. We will not decrease imports from Iran. Iran is an important country for India despite US and European sanctions on Iran," the finance minister said. India, the world's fourth-largest oil consumer, is Iran's second-biggest oil client after China. The US and other Western sanctions have been imposed on Iran's economy over Tehran's controversial nuclear programme. US President Barack Obama added to those measures on December 31, last year when he signed into law additional sanctions targeting Iran's central bank and financial sector. Indian Ambassador to the US Nirupama Rao last week said that India's purchase of oil from Iran has dropped slightly in last two years and is expected to drop further given the difficulties New Delhi might have in making payments through banks due to tough sanctions imposed against Iranian banks. Rao had said India was in touch with the US Government and closely monitoring the developing situation concerning Iran, when asked about the pressure from the US that India needs to reduce its dependency on Iranian oil.
29 Jan 2012;business-standard.com:Tehran: Oil prices could rise as high as $150 a barrel because of the European Union ban on imports of Iranian crude, the country's deputy oil minister was quoted as saying by the official IRNA news agency on Sunday. "Although a precise prediction cannot be made on oil prices, it seems we will witness a $120 to $150 oil price per barrel in future," said Deputy Oil Ministry Ahmad Qalebani. Benchmark Brent crude prices rose to around $111.50 a barrel on Friday on expectations Iran's parliament will vote to halt exports to the European Union as early as next week in retaliation for EU plans to stop all Iranian crude imports by July. Escalating tensions between Iran and Western allies over Tehran's nuclear programme, including Iranian threats to close the vital Straits of Hormuz, have helped push up Brent crude prices by about $8 a barrel since mid December. But analysts say the world is likely to have more oil this summer thanks to additional output from Saudi Arabia, Iraq and Libya that will more than make up for any lost from Iran after the EU's ban is imposed on July 1 - and this is likely to be reflected in oil prices. Iran's parliament is due to debate a bill this week that would cut off oil supplies to the EU in a matter of days, in response to a decision last Monday by the 27 EU member states to stop importing crude from Iran as of July. The EU banned imports of oil from Iran on Monday and imposed a number of other economic sanctions, joining the United States in a new round of measures aimed at hindering Tehran's nuclear development programme. Qalebani also warned foreign oil companies to either renew their long term contracts with Tehran or face the consequences of losing their benefits from the OPEC's second-largest producer. Under buyback contracts, a common feature of the Iranian oil industry, investments in oil field projects are paid back in oil, often over many years.
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