22 Jan 2012;deccanherald.com:Annapurna Singh:A Group of Ministers’ (GoM) meeting will be held shortly to decide on direct import of Aviation Turbine Fuel by domestic airliners, a move, if it comes into force, will save airliners from paying hefty state sales tax. According to the current practice, the ATF is imported by the oil marketing companies and domestic airliners in turn buy it from these OMCs ending up paying hevy state-level levies. A senior government official told Deccan Herald that the GoM is expected to be held shortly on the issue. He said that the Directorate General of Foreign Trade (DGFT) has already given in-principle approval to the proposal by the airliners and it has been sent to the Cabinet for a decision. Earlier this week, the petroleum ministry had endorsed a proposal from the DGFT to let private parties to directly import jet fuel, giving a free hand to cash-strapped carriers to make their way through. State taxes on aviation turbine fuel range between 25 per cent and 30 per cent. The oil ministry gave its clearance at an inter-ministerial meeting on Tuesday. Importers, however, will have to pay an eight per cent customs duty on jet fuel, which is much less than the state-level levies that they will be able to save now. The cash-strapped Kingfisher airlines had recently told the DGFT that ATF accounts for about two fifth of its total operating cost. Kingfisher also said that cost cutting measures including direct import of jet fuel will enable it to remain functional and meet its commitments to customers and banks. Oil companies, however, are not very keen to allow this as they will have to face competition from imported jet fuel. India, which has a surplus crude oil refining capacity, exported 2.86 million tonnes of jet fuel in the April-October period this year, earning $2.87 billion.
Will pay VAT on sale of gas in UP from Feb 1: RIL to SC
Monday, 23 January 2012
23 Jan 2012;timesofindia.indiatimes.com:NEW DELHI, Reliance Industries Ltd (RIL) on Monday assured the Supreme Court that it would start paying Value Added Tax (VAT) to Uttar Pradesh government on sale of gas in the state from February one till a decision by the Allahabad High Court on its plea against the tax imposition. Taking note of RIL's submission, a bench headed by Justice Altamas Kabir asked the high court to decide expeditiously the company's plea against state government's decision to impose VAT. The company also submitted that the VAT imposed on its product would be passed on to the consumers. The court's order came on an appeal by the state government challenging the high court's interim order staying imposition of the tax on the sale of gas by RIL. The UP government had challenged a July 26, 2011 order of the high court which granted stay on levy of Rs 724 crore as VAT for sale of the gas during 2009-2010. The Supreme Court had on August 23, 2011 issued notice and sought responses of the Centre. According to the state, RIL, which is engaged in extracting and refining petroleum and petrochemical products, was supplying natural gas to various fertiliser companies in Uttar Pradesh and, hence ,the state was entitled to levy VAT on the company. RIL had taken the plea in the high court that the transaction in question is central sale made by it from the state of Andhra Pradesh and it is not liable to pay local tax (VAT) to the state government.
Fiat to expand its presence in India through Chrysler's Jeep; To launch Alfa Romeo & Maserati
Saturday, 21 January 2012
21 Jan 2012;economictimes.indiatimes.com:Lijee Philip & Ketan Thakkar:MUMBAI: Italian carmaker Fiat has plans to add heft to its diminutive presence in the Indian market by leaning on Chrysler, the US automaker in which it acquired a majority stake three years ago, as well as by launching a few of its own premium brands such as Alfa Romeo and Maserati. A team of senior officials from Chrysler recently visited India to conduct product clinics for the Jeep Grand Cherokee, an SUV in a price segment similar to that of Toyota's Fortuner, Ssangyong's Rexton and Chevrolet's Captiva. A person close to the development said a blueprint is being created to increase Fiat's presence in India with new models and, if these plans fructify, the new launches will be outside the 50:50 joint venture Fiat has with Tata Motors to make cars for the two companies as well as transmissions and engines. The Chrysler model will be brought into the country in completely-knocked-down (CKD) condition and assembled at the Tata-Fiat manufacturing operations in Ranjangaon, near Pune, on contract; the Fiat brands will be brought in via the CBU (completely built unit) route. While almost every global automaker has expanded operations in India by launching cars in segments from compacts to luxury sedans, Fiat hasn't quite stepped on the gas. By getting the cult Jeep brand, Fiat will plug a gap in its portfolio by carving out a presence in the SUV segment. Fiat India CEO Rajeev Kapoor said: "I have no comments to make on this." Ariel Gavilan, spokesperson for Chrysler, said, "There are no new plans to be announced at this time." People close to Fiat point out that Chrysler has big plans for emerging markets, and India is at the core of that strategy.
21 Jan 2012;timesofindia.indiatimes.com:NEW DELHI: The UPA government is set to carve the biggest pork barrel in recent times by changing the marketing guidelines for state-run fuel retailers to reserve 27% of new petrol pumps and cooking gas dealerships for OBCs after the model poll code gets over. As first reported by TOI on October 19, the oil ministry has forced state-run fuel retailers to roll out 11,600 new petrol pumps, a bulk of which would be in the poll-bound states. The ministry is changing the guidelines to extract the maximum benefit of that move by bringing in reservation for a big chunk of voters. The initiative has been stuck because the model code of conduct bars government from announcing any popular initiative to deny any ruling dispensation from influencing voters. The oil ministry's corridors in New Delhi's Shastri Bhavan are expected to see a rush of favour-seekers once the code ends in early March, harking back to days when quotas and VIP references held key to a cooking gas connection or a petrol pump. The present guidelines reserve 25% of new pumps for SC and ST applicants. The new guidelines would see that reduced to 22.5%, while 27% dealerships would be reserved for OBCs. The remaining 50% of the pumps would be for general category candidates. About 33% of the locations in each category are reserved for women belonging to that particular category. In addition, physically handicapped, former/martyred paramilitary/police personnel, freedom fighters and outstanding sportspersons would also get quota in each of the three categories - SC/ST, OBC and general. Physically-handicapped persons get 5% reservation, while paramilitary/police/government personnel and defence personnel are each allotted 8% of new petrol pumps. Another 2% reservation is provided for freedom fighters and outstanding sportspersons, taking the overall reservation to 50%.
General Motors reclaims world's biggest carmaker title as Toyota skids
Friday, 20 January 2012
19 Jan 2012;economictimes.indiatimes.com:PARIS: General Motors reclaimed its title as the world's biggest automaker on Thursday, successfully emerging from its 2009 bankruptcy woes to overtake German giant Volkswagen and Japanese Toyota in the race to the top. The US giant sold 9.03 million vehicles globally in 2011, up 7.6 percent from a year ago, as it cashed in on a recovery in the north American market which delivered a 11.4 percent sales jump to 2.9 million. The carmaker also posted strong results elsewhere, with European sales up 4.4 percent and 3.9 percent in South America. Its best-selling marque Chevrolet posted record sales of 4.75 million units, making up almost half of the global total. The results marked GM's sharp U-turn from near demise in 2008, when the global financial crisis forced it to turn to the US government for a bailout. In June 2009, it filed for bankruptcy which allowed it to change labour contracts and dump brands, dealers, workers and plants in the process. It emerged from bankruptcy much leaner and more focused, and in November returned to the stock exchange in a share offering that raised a massive $23.1 billion, helping it to pay back half of its government debt. As GM's fate began to change for the better, its Japanese rival Toyota, which had roared ahead during GM's difficult years to take top spot among the world's biggest automakers, began to see woes piling up. In the last two years, the Japanese giant suffered the double whammy of massive vehicle recalls and then last March's devastating earthquake and tsunami in its home country. Reputed for its well-made family sedans, Toyota's reputation took a dent in 2010 when it was forced to recall more than nine million cars in the world over diverse technical problems, including defective braking systems. The year 2011 brough an earthquake and tsunami in Japan that badly hindered production for several months in the archipelago and abroad. Floods in Thailand at year-end added to its problems, as factories in its key southeast Asian manufacturing base were disrupted. As a result, its 2011 sales fell to 7.0 million units, down 6.0 percent, according to provisional data released at the end of December. If confirmed, the firm would be relegated to third place, behind Volkswagen. The German giant which owns brands including Audi, Seat, Skoda, Bentley, Bugatti and Lamborghini has said it sold 8.15 million vehicles during the year, up 14 percent from 2010. It is aiming to become the biggest automaker by 2018. But Toyota, which also owns the luxury brand Lexus, is planning to give both its rivals a run for their money, with sales targets of 8.488 million vehicles in 2012 and 9.0 million by 2013.
Petrol price decontrol seen only in vapour outline
Friday, 20 January 2012
20 Jan 2012;business-standard.com:Ajay Modi:New Delhi: Despite the legal removal of government control on the price of petrol since June 2010, state oil marketing companies (OMCs) continue to lose sharply on its retail sale. A hit of about Rs 20 crore daily for the three OMCs, says the finance director of one of these. In 2010-11, the first year of the ostensible decontrol, the three OMCs (Indian Oil, Bharat Petroleum and Hindustan Petroleum) together lost Rs 2,200 crore on petrol sale. In the first six months of 2011-12, they have lost another Rs 2,500 crore. The full year should see a loss of at least Rs 4,500 crore. The reason is political. The OMCs are all government-owned and the state’s heavy hand is clear in the way any change in pricing is effected. Or, to be more accurately, not effected. Even parties which are part of the ruling coalition, the Trinamool Congress being one, have not only attacked the government on even the increases allowed, but also threatened to withdraw support. In January last year, despite a surge in the price of imported crude oil, the OMCs were made to put their price rise plans on hold, due to four states having scheduled Assembly polls later in the year. At the start of the current financial year, last April, when the OMCs were losing almost Rs 7 on every litre of petrol they sold, Indian Oil chairman R S Butola said they’d all “consciously” decided not to revise the price to keep “the environment happy” in view of rising inflation. By May, the loss of retailed petrol had reached Rs 10.50 a litre. Price rises were subsequently allowed, to only partially offset the losses — they precipitated a storm of political criticism. This month, price rise plans of OMCs have again been put on hold, with four states going to the polls in due course. The fortnightly review of prices has been skipped twice, although the OMCs current loss on petrol is estimated to have touched as much as Rs 1.50 for each litre sold. These companies also lose heavily on the three petro products which are regulated — diesel, kerosene and domestic cooking gas. However, the losses here are supposed to be compensated in some form, such as a mix of cash reimbursal from the government and discounts on purchase from upstream refiners such as Oil India and Oil and Natural Gas Corporation. But, any loss on petrol is to be borne squarely by the OMCs. There are two private retailers, Essar and Reliance, and they’re affected as the government companies are selling at a subsidised rate. The private competitors’ initial excitement, followed by rapid re-opening of closed outlets and expansion plans, is now quite subdued. Is petrol decontrol, then, a sham? Experts say it is still better than the earlier situation. “There is a semblance of decontrol but we are still away from real decontrol, as the government continues to have a say in pricing. But we cannot say that the pre-decontrol era was better. This is a step in the right direction but we should strengthen it,” said Deepak Mahurkar, associate director, PricewaterhouseCoopers.
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