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."
03 Jan 2012;business-standard.com:Mumbai: Fuel-efficient cars and a slew of new SUV models will be unveiled at Delhi's Auto Expo later this week as global carmakers continue to rev up their activity in one of the world's few growth engines despite a recent slowdown in sales. Around 50 new models will be presented to hundreds of delegates and half a million visitors as carmakers look to move on from a year of sluggish sales due to high interest rates and rising costs and fuel prices in Asia's third-largest economy. The debut of South Korea's Ssangyong, owned by India's Mahindra & Mahindra , and product launches from Toyota Motor Corp and Renault SA will underline the country's importance to the world's biggest carmakers. "The overwhelming feeling is that this current sales slowdown is a temporary phenomenon and global carmakers are certainly betting on India to bounce back. There's no slackening of interest here," R.C. Bhargava, chairman of Maruti Suzuki , India's biggest carmaker, told Reuters. "Everybody is working on hybrid, fuel-efficient and green technology vehicles. There's an exciting race to find a small, cheap hybrid car for India, which will certainly be a winner." Jaguar Land Rover, owned by India's Tata Motors , will skip the overlapping North American International Auto Show in Detroit to focus on the India event, while Ford Motor Co said it will make a world-first announcement in New Delhi. Car sales in India grew 30% in the fiscal year to end-March 2011, cheering global carmakers as economic turmoil hit sales in developed markets. Since then, interest rate hikes by India's central bank and rising input costs that pushed up prices have dented demand as economic growth cools. India's small-car segment, made famous by Tata's ultra-cheap Nano and targeted by firms such as General Motors Co and Fiat SpA's Chrysler, has suffered most as first-time buyers balk at the increased cost of credit or stick with a motorcycle, considered a family vehicle in India. Still, the Indian economy is likely to grow at around 7% this fiscal year and rising salaries and a rapidly-growing middle class mean it remains one of the world's most exciting markets for automakers. Green vs gas-guzzlers: Led by the launch of Mahindra's first-ever electric cars following its 2010 acquisition of Reva and the first glimpse of a hybrid model of Maruti's popular Swift hatchback, the expo will see a slew of fuel-efficient and green technology launches. After crowds swamped the show two years ago, police have asked organisers to cap daily attendance at this year's six-day event at 100,000, local media reported. Carmakers are also set to muscle in on India's popular SUV segment, which fared better than smaller cars last year, with an offering from Maruti, a widely-anticipated four-wheel debut from motorcycle experts Bajaj Auto, and a multi-utility model launch from South Korea's Hyundai Motor Co. Luxury carmakers, riding 40% annual sales growth in India, will use the expo to increase their product lines, with Daimler AG's, Mercedes Benz and Volkswagen AG's, Audi rolling out new SUV and sports car models. BMW AG, market leader in the luxury segment, will unveil its Mini brands in India for the first time. The Society of Indian Automobile Manufacturers will also announce its new growth outlook for the industry at the expo, a month after it said sales would likely show no growth in the 12 months to end-March. Maruti, 54.2% owned by Japan's Suzuki Motor Corp , produced every other car sold in India last January. But labour strikes that cost $500 million in lost production and a pronounced slowdown in sales of small cars and petrol models -- its forte -- have hit the company hard. Tata, Mahindra and Hyundai sales have jumped as Maruti's factories slowly ground back into action, while diesel sales have soared in recent quarters thanks to government subsidies that make the fuel about $0.40 per litre cheaper than petrol.
03 Jan 2012;business-standard.com:Ajay Modi:New Delhi: Gets US supply deal at substantially lower benchmark than traditional one. GAIL, the natural gas major, has contracted an import deal from a US-based company for deliveries from 2016-17 at a price far more competitive than the usual benchmark for such deals. The country’s biggest gas marketer has contracted import of 3.5 million tonnes annually at what is known as the Henry Hub-benchmarked price. Henry Hub is the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange. It is a point on the natural gas pipeline system in Louisiana and spot and future prices set at Henry Hub are generally seen to be the primary one for the North American gas market. The big change for India is that all import deals signed by Indian companies till now were at a price calculated as a certain percentage of what is termed the Japanese Crude Cocktail (JCC). This is the nickname for Japan Customs-cleared Crude, the average price of customs-cleared crude oil imports into Japan. It is a commonly used index in long-term liquefied natural gas (LNG) contracts in Japan, Korea and Taiwan. Traditionally, the JCC-linked price has remained substantially costlier than the Henry hub price. A K Balyan, managing director and chief executive officer of Petronet LNG, the biggest importer, said it was a good move to look at the US gas market, as it was favourably priced. “It is a good effort by GAIL. It enlarges the source portfolio and impacts traditional gas suppliers, ushering in a more competitive environment. We will also look to source gas from the US,” he said. The increasing shale gas production in the US has lead to a surplus, likely to increase in the coming years. The US is, therefore, eyeing export to countries like China, Japan, Korea and India. The increasing gas supply from the US is expected to exert pressure on global prices. In the past, the US has been an importer of gas. “With an increase in US gas production, the gas receiving terminals need to be converted to exporting terminals,” Balyan said. Timely The new gas price contract has been entered at a time when output from the biggest domestic gas field, the Reliance Industries’ operated KG-D6, has fallen 30 per cent since March 2010 and is still declining, with a reversal unlikely before 2013-14. No major discovery by government-owned Oil and Natural Gas Corporation or Gujarat State Petroleum Corporation are expected to start production anytime soon. Domestic natural gas production is currently about 115 million standard cubic metres per day (mscmd) and another 46 mscmd is imported in the form of LNG. Current demand is 189 mscmd. The new pricing will help companies into expansion. Indian Oil is setting up a new LNG terminal and Petronet LNG is expanding capacity. Shell is also expanding its Hazira terminal capacity. All these companies are trying to contract import at competitive prices. “It is good to see that GAIL is diversifying the LNG supply source. It is expected that the landed cost of Henry Hub-price based LNG in India is expected to be cheaper by $5-7 per million British thermal units, based on the prevailing price, as compared to Australian Gorgon LNG (a big project in Western Australia) supply. In terms of energy cost in the power sector, there would be a difference of Rs 1.75-2 per unit,” said Rakesh Jain, associate director (energy) at Feedback Ventures. He said GAIL’s deal would encourage other LNG sourcing companies to try for similar contracts with US suppliers. Industry experts anticipate a pressure on the pricing of new gas contracts sourced from traditional suppliers. “Pricing will have an impact after 2012-13, with the new Henry Hub benchmark pricing that GAIL has negotiated. This will lead to a trend of pricing shift from JCC. Everybody is looking for cheap gas. It will happen,” said M Ravindran, managing director, Indraprastha Gas, the monopoly supplier in and around Delhi.
No hike in petrol prices, government wary of 'negative image'
02 Jan 2012;timesofindia.indiatimes.com:NEW DELHI: Petrol prices will not be raised this fortnight as state-owned oil firms apparently could not get political clearance for the over Rs 2 per litre hike in rates needed to achieve parity with the imported cost on account of the weakening rupee. Indian Oil (IOC) and other state-run firms, which had last month refrained from hiking petrol prices as the government was wary of protests while Parliament was in session, are not raising the rates even this fortnight, a source privy to the development said. Given the drubbing the Lokpal Bill got in the Rajya Sabha, the government does not want to alienate the Trinamool Congress, the most vocal opponent of fuel price increases within the ruling UPA. Furthermore, assembly elections in five crucial states, including Uttar Pradesh and Punjab, have been announced and a hike in petrol prices would have created a "negative image", the source said. Oil firms, as per the usual practice, revise the rates for petrol on the 1st and 16th of every month based on the average imported price of oil and exchange rates during the previous fortnight. However, they postponed a decision on the hike on December 31 as it was New Year's eve. Today, the oil firms could not get the "informal political approval" they used to seek from their majority shareholder, the source said. A hike of over Rs 2 per litre was necessitated because the rupee depreciated to Rs 53.07 per US dollar in the second fortnight of December, based on which the rates on January 1 were to be decided. The average exchange rate stood at Rs 51.98 per US dollar in the first fortnight of December. International prices of gasoline, against which domestic petrol rates are benchmarked, averaged USD 111.71 per barrel in the second half of December, almost the same as in the previous fortnight. Petrol at IOC and Bharat Petroleum Corp (BPCL) pumps in Delhi is now priced at Rs 65.64 per litre, while it costs Rs 65.65 a litre at retail outlets of Hindustan Petroleum Corp. The trio had cut petrol prices twice in November in the wake of a drop in international oil rates. They reduced petrol prices by Rs 2.22 per litre, or 3.2 per cent, from November 16, followed by a Rs 0.78 per litre cut from December 1. The domestic rates, which were last revised on November 30, are pegged at a Rs 51.50 per US dollar exchange rate. State-owned oil companies use the fortnightly average of benchmark oil prices and exchange rates to revise retail rates on the 1st and 16th of every month. Petrol prices were freed from government control in June last year, but public sector companies continue to informally consult their parent Oil Ministry before taking any decision. The government continues to control rates of diesel, domestic LPG and kerosene, which are sold way below cost to keep inflation in check. The oil firms lose Rs 12.71 per litre of diesel, Rs 29.93 per litre of kerosene and Rs 326 per 14.2-kg LPG cylinder.
02 Jan 2012;hindustantimes.com:New Delhi: A hike of about Rs 2.10-2.13 per litre in petrol price is likely as oil companies will meet on Monday to revise rates of petrol in wake of weakening rupee. But any hike will need nod from the government given that assembly elections in five states are around the corner. Last week related stories Falling Rupee effect: CNG prices hiked by Rs 1.75 CNG prices were hiked in New Delhi and NCR by Rs 1.75 in the prices of CNG per kilogram. CNG now costs Rs 33.75 per kg in Delhi. In Noida, Greater Noida and Ghaziabad, the prices have been increased by Rs 2. "While international price of gasoline (against which domestic petrol prices are benchmarked) are more or less at the same level (as at the time of last revision), the rupee has depreciated to about Rs 53 to a US dollar," an official said. This warrants an increase of Rs 1.78 per litre and after adding local sales tax or VAT, the desired hike in petrol price in Delhi is Rs 2.10-2.13 a litre. Petrol at Indian Oil Corp and Bharat Petroleum Corp petrol pumps in Delhi is now priced at Rs 65.64 per litre and at Rs 65.65 a litre on retail outlets of Hindustan Petroleum Corp. Oil firms had, at the last review on December 15/16, decided not to burden the consumers with about Re 1 per litre hike in petrol price needed at that time, as they felt Reserve Bank's intervention may help arrest fall in rupee's value. State-owned oil companies, revise rates of petrol on 1st and 16th of every month based on the average imported price and exchange rate during the fortnight. The oil firms, in November cut petrol prices twice on drop in international oil rates. The companies reduced petrol prices by Rs 2.22 per litre, or 3.2%, from November 16, followed by a Rs 0.78 per litre cut from December 1. Petrol price was freed from government control in June last year but public sector companies continue to informally consult their parent oil ministry before taking a decision.
01 Jan 2012;timesofindia.indiatimes.com:NEW DELHI: On a day PM Manmohan Singh called for phased rationalisation of fuel prices and phasing out of subsidy, the oil ministry on Saturday made a mockery of its deregulation policy by 'advising' state-run retailers to avoid spoiling the New Year and defer a decision on raising petrol price till Monday. Technically, petrol has been deregulated since June 2010 and the state fuel retailers review the price on 15th and last day of every month. But in practice, they don't move without a cue from the ministry that did not allow them to raise petrol price by about Re 1 a litre on December 15. Since then, the price of both crude and the fuel in international bulk markets, a combination of which make the marker for domestic pump prices, have risen. The rupee too has fallen further against the dollar. As a result, the quantum of hike needed has risen to about Rs 2 a litre. The three state-run retailers have lost Rs 2,500 crore on petrol in the first quarter, which unlike diesel and kitchen fuels would not be compensated by the government. They are now hoping to get a green signal from the ministry on Monday. While the ministry plays coy in case of petrol price, it had no problem in allowing a Rs 1.75-per Kg increase in the price of gas sold as automotive fuel in Delhi on New Year eve. Even in this case, service provider IGL, a joint venture of state-run gas utility GAIL and the Delhi government, had kept the ministry in loop. The ministry is guided by concerns over petrol price hike's impact on electoral outcome in five key states that are going to polls shortly. But even here, this week perhaps was the last window for it to have cleared an increase before the poll fever rises from next week or so. The ministry's stand appears stark in the backdrop of the PM's New Year message. "Both goals of expanding new investment and achieving energy efficiency require a more rational pricing policy, aligning India's energy prices with global prices," Singh said.
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