04 Jan 2012;business-standard.com:Ajay Modi & Vrishti Beniwal:New Delhi: It’s a classic case of the tail wagging the dog. Perhaps, for the first time, the Union government’s outgo on account of oil subsidies will be higher than what the exchequer makes by way of various duties on petroleum products. Whilst the government’s gross oil subsidy burden, essentially compensation to state-owned oil marketers like Indian Oil and Hindustan Petroleum for selling diesel, kerosene and domestic cooking gas below cost prices, is set to top Rs 1,37,000 crore this fiscal, its revenue from various petroleum-related duties, taxes, dividends from oil companies, et al, is estimated at just Rs 86,000 crore. Under the current mechanism, government-owned oil producers in ONGC and Oil India pitch in with a third of subsidies, but even then the government’s share, at Rs 91,790 crore, will pip its revenues from the sector this fiscal. The cut in customs duty on crude oil, petrol and diesel, and excise reduction for diesel last June, coupled with lower corporate tax and dividends from oil companies, is estimated to shave government revenue from the sector by Rs 50,000 crore for 2011-12. Rising global crude prices and their adverse impact on oil marketers forced the government to provide these sops. In 2010-11, oil revenues topped Rs 1,36,000 crore compared to the gross subsidy burden of Rs 78,190 crore. Though Prime Minister Manmohan Singh recently flagged off the need to cut back on all subsidies except food, a price revision of even non-controlled products like petrol looks unlikely given that as many as five politically important states are going to elections in the next month or so. Interestingly, states make up an additional Rs 89,000 crore from taxes and royalties on petroleum products. Currently, government-owned oil companies are incurring a loss of Rs 388 crore per day on the sale of three subsidised products in diesel, kerosene, and cooking gas. Collectively, IOC, HPCL and BPCL have booked losses of over Rs 23,250 crore between April and September 2011. Government refusal to let them take petrol prices up this fortnight is making them bleed, almost Rs 2 per litre, even for a fuel that is theoretically not controlled. The per litre loss on diesel and kerosene is Rs 11.30 and Rs 28.50, respectively, while it is Rs 326 per cylinder on domestic cooking gas. What makes matters worse for these companies is that crude prices have hardened compared to last year and rupee depreciation has only added to the costs. The country meets over 80 per cent of its crude oil requirements from imports.
04 Jan 2012;business-standard.com:Kalpana Pathak:Mumbai: The company’s existing infrastructure in the state suits its expansion plan. State-run IndianOil Corpo-ration (IOC) may set up its next refinery, a 15 million tonnes per annum (mtpa) unit, on the western coast in Gujarat at an investment of Rs 30,000 crore. According to a senior IOC official, the country's biggest oil refining and marketing company, which also had Maharashtra in mind, favoured Gujarat, given its crude oil and product pipeline infrastructure. Raj Kumar Ghosh, director, refineries, IOC, had earlier said the proposed unit may also have a petrochemical plant along the lines of the Paradip refinery. "We plan to double our crude refining installed capacity from 61.7 to 123 mtpa in the next decade. And given our existing pipeline infrastructure in Gujarat, it seems a good location for the new refinery,” said a senior IOC official. The modes of financing the project are being worked out, he said. IOC' Koyali refinery in Gujarat has a capacity of 13.7 mtpa. The company operates a 1,870-km-long Salaya-Mathura pipeline from Salaya (near Vadinar) in Jamnagar district on the coast of Gujarat to bring crude oil to its refineries at Koyali, Mathura (Uttar Pradesh) and Panipat (Haryana). At Vadinar, it has a vast crude oil tank farm of 13 tanks with a total capacity of 0.773 mtpa. It also has crude oil storage tank farm at Viramgam with a total capacity of 0.331 mtpa. Another storage tank farm at Chaksu has six tanks with a total capacity of 0.219 mtpa. The 1,194-km long Mundra-Panipat pipeline transports crude oil from Mundra on the Gujarat coast to Haryana. It has a 74-km long pipeline from Mundra to Kandla, which was hooked up to the existing system of Kandla-Panipat section of Kandla-Bhatinda Pipeline near Gandhidham. IndianOil controls 10 of India’s 20 refineries with 34.8 per cent share of the national refining capacity. The company on its website lists out growth plan for its refineries with an outlay of Rs 55,000 crore for capacity augmentation, de-bottlenecking, bottom upgradation and quality upgradation. Major projects under implementation include a 15 mtpa grassroots refinery at Paradip, Orissa, Naphtha Cracker and Polymer Complex in Panipat. The Panipat refinery's capacity would be expanded from 12 mtpa to 15 mtpa. Gujarat is also home to Reliance Industries' 1.24 million barrels per day (mbpd) of crude processing capacity refinery at Jamnagar and Essar Energy's refinery at Vadinar with a capacity of 14-million tonnes. The refinery is being expanded to 20 mtpa by September 2012.
03 Jan 2012;deccanherald.com:Chennai: India's nuclear power plant operator, Nuclear Power Corporation of India Ltd (NPCIL), has shut down one of the two units at its Madras Atomic Power Station (MAPS) for maintenance and surveillance test purposes, an official said Tuesday. "We have shut down the second unit for maintenance activities as well as to carry out some surveillance tests. We plan to restart the reactor Jan 8 or 9," MAPS station director K. Ramamurthy told IANS. NPCIL has two units at MAPS, located at Kalpakkam around 80 km from Chennai, generating around 150 MW each. The rated capacity of the reactors is 220 MW. "Availability of uranium is the issue in increasing the generation," Ramamurthy added. Queried about the steps taken by MAPS to get 5-year operational licence than a limited period one from the Atomic Energy Regulatory Board (AERB), he said: "We are planning to augment the cooling water resources while the standby power systems has been augmented with two diesel gensets. We are planning to have seismic trips." He said both the units have licence to operate till March 2012. Every nuclear power plant in India has to renew its operational licence once in five years. With the accident in Fukushima reactors in Japan, additional safety measures have been suggested by AERB to NPCIL for its units. The NPCIl has also been asked for an implementation roadmap. "We are looking at the need for a seismic condition qualified building to house emergency equipments. The reactor and turbine buildings are seismic condition qualified buildings," Ramamurthy added.
Bajaj launches India's latest ultra-low-cost car RE60
03 Jan 2012;hindustantimes.com:New Delhi: Bajaj Auto unveiled India's latest ultra-low-cost car on Tuesday, a 200cc four-seater that looks set to compete with the Tata Nano for the title of the world's cheapest auto. The group gave no price for the low-emission vehicle which will have a top speed of 70 kilometres an hour (43 miles an hour), but the build quality indicated it was pitched firmly at the bottom of the market. The "RE60" is the first foray into the passenger car market by Bajaj, a motorbike and rickshaw specialist which entered into an ultimately aborted alliance with Nissan and Renault in 2009 to develop the vehicle. Group managing director Rajiv Bajaj said the core market for the RE60 would be owners of three-wheeled motorised rickshaws who wanted to upgrade to four wheels, but it was also for anyone who "wanted to take it home." One of the models on display was fitted with a taxi meter, an indication that Bajaj hopes the snub-nosed car with small wheels might replace India's iconic rickshaw as the commercial passenger vehicle of choice. Marketing material aired at the launch also showed the RE60 as a mass market product pitched at urban commuters, with the emphasis placed on its extremely high fuel efficiency and its low carbon dioxide emissions. "At Bajaj Auto, we believe the people of the planet deserve much better, much faster," Bajaj said of the car, which will be launched some time this year. The petrol engine will do 35 kilometres per litre (83 miles per US gallon) in normal driving conditions and emits just 60 grams of carbon dioxide per kilometre, the company said. It weighs just 400 kilograms (880 pounds). Bajaj said that emissions were "typically half of what the small cars currently emit in our market." India has become a centre of low-cost innovation exemplified by the Tata Nano, which was launched to great fanfare in 2009 as a means for poor families to get their hands on their first car. A no-frills model costs as little as Rs 140,880 ($2,770). Other innovations in India targeting the hundreds of millions at the bottom of the economic pyramid include a low-energy refrigerator, a low-cost water purifier and solar-powered ATM cash machines for rural areas. But the Nano has so far failed to take off as expected, with analysts blaming poor marketing by the company which sold it as a cheap product rather than an aspirational one for the burgeoning middle classes. There have also been a series of technical problems, as well as some highly publicised engine fires, meaning sales have been a fraction of the 25,000 a month the company once expected. Parent company Tata Motors reported this week it had sold 7,466 Nanos in December, a rise of 29 percent from the same month last year. Bajaj took several digs at the car during his presentation, saying "I am personally not sure what the Nano is." Bajaj, Renault and Nissan abandoned their joint low-cost car project in July last year amid differences over the direction of the project. Renault had voiced concern about the quality of the final product. Small, fuel efficient cars are set to take centre stage at the India Auto Show which kicks off Thursday in New Delhi, while luxury brands such as BMW will look to increase their presence in a market that is one of the few global hotspots. The Indian market is forecast to grow this financial year to March but at a slower rate than earlier forecast as the economy slows due to higher borrowing costs and global economic troubles. The Society of Indian Automobile Manufacturers has sharply cut its forecast for Indian car sales growth in the fiscal year to between two and four percent, down from an earlier projection of 10-12%.
Don't come back to Gulf, Iran warns US carrier; oil prices jump above $101
03 Jan 2012;timesofindia.indiatimes.com:TEHRAN: Iran's army chief on Tuesday warned an American aircraft carrier not to return to the Persian Gulf in Tehran's latest tough rhetoric over the strategic waterway, part of a feud with the United States over new sanctions that has sparked a jump in oil prices. Gen. Ataollah Salehi spoke as a 10-day Iranian naval exercise ended near the Strait of Hormuz at the mouth of the Gulf. Iranian officials have said the drill aimed to show that Iran could close the vital oil passage, as it has threatened to do if the United States enacts strong new sanctions over Iran's nuclear program. The strait, leading into the Gulf of Oman and Arabian Sea, is the only possible route for tankers transporting crude from the oil-rich states of the Persian Gulf to markets. A sixth of the world's oil exports passes through it every day. Oil prices rose to over $101 a barrel on Tuesday amid concerns that rising tensions between Western powers and Iran could lead to crude supply disruptions. By early afternoon in Europe, benchmark crude for February delivery was up $2.67 to $101.50 a barrel in electronic trading on the New York Mercantile Exchange. The jump came a day after Iran test-fired a surface-to-surface cruise missile as part of the maneuvers, prompting Iran's navy chief to boast that the strait is "completely under our control." Salehi's warning for the US aircraft carrier not to come back seemed aimed at further depicting the strait and the Gulf as under Iran's domination, though there was little way to enforce his warning without military action. The strait is divided between Iran and Oman's territorial waters, and international law requires them to allow free passage through it. "We recommend to the American warship that passed through the Strait of Hormuz and went to Gulf of Oman not to return to the Persian Gulf," Salehi was quoted as saying by the state news agency IRNA. He said Iran's enemies have understood the message of the naval exercises, saying, "We have no plan to begin any irrational act but we are ready against any threat." The aircraft carrier USS John C. Stennis and another vessel exited the Gulf through the Hormuz Strait a week ago, after a visit to Dubai's Jebel Ali port, according to the US Navy's Bahrain-based 5th Fleet. The Fleet did not immediately respond to requests for comment on Salehi's warning. Iran's sabre-rattling over the strait and the Gulf has come in response to US preparations to impose tough new sanctions that would ban dealings with Iran's Central Bank. That would deeply hurt Iran's oil exports since most countries and companies use the bank to conduct purchases of Iranian crude. Iran relies on oil revenues for around 80 per cent of its budget, meaning a cut-off would be devastating to its already weakening economy. President Barack Obama has signed the sanctions into law but has not yet enacted them. The sanctions would be the strongest yet by the US, aimed at forcing Tehran to back of its nuclear program, which many in the West say is intended to produce a nuclear weapon. Iran denies the claim, saying its program is peaceful. French foreign minister Alain Juppe said on Tuesday that is country wants Europe to agree on similar sanctions against Iran by Jan 30 to show its determination to stop Iran from developing a nuclear weapon. He told the French television station i>TELE that there is "no doubt" that Iran is continuing with plans to build a bomb. Iran's naval maneuvers took place over a 1,250-mile (2,000-kilometer) stretch of water beyond the Strait of Hormuz at the mouth of the Persian Gulf, as well as parts of the Indian Ocean and the Gulf of Aden, according to Iranian officials. A leading Iranian lawmaker said on Sunday the maneuvers served as practice for closing the strait if the West enacts sanctions blocking Iranian oil sales. Top Iranian officials made the same threat last week.
03 Jan 2012;timesofindia.indiatimes.com:NEW DELHI: Year-end discounts saw car sales end 2011 on a modest note as most of the companies, except for market leader Maruti Suzuki, saw numbers go up in December. The car market, which struggled to stay afloat for most part of 2011 due to high interest rates and pinching petrol prices, has been trying to regain normalcy, but it still seems to be some time away. Maruti, which was jolted in the year by crippling strikes at its Manesar plant, saw numbers go down 13% in December at 77,475 units against 89,469 units in the same month of 2010. The company's mainline portfolio of Alto, A-Star, WagonR and Maruti800 compact models saw numbers remain low as sales went down by 16%. The company's premium hatchback segment of Swift, Estilo and Ritz was near-flat with a 0.5% growth. But as Maruti's numbers declined, others managed to grow. Hyundai, which recently launched a new entry-car Eon, saw numbers grow 13% at 29,516 units against 26,168 units in December 2010. Arvind Saxena, the company's sales & marketing director, said demand is expected to remain subdued in the coming months. "An increase in sales in December gives us cause for some cheer in a year that has been below expectations. We do not expect an upturn in the market in the near future."
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