08 June 2010;timesofindia.indiatimes.com:NEW DELHI: Oil minister Murli Deora said on Tuesday that market-driven prices of fuel would not hurt people, a day after the government deferred a decision to raise prices. "Decontrol or market-driven prices will not hurt common man and will help the oil companies that are suffering losses (for selling fuel at cheaper rates)," Deora said. He said the ministerial meet could not take a decision on Monday as four ministers were not present. "Now, we are trying to find a date when all members will be present", he said.
07 June 2010;timesofindia.indiatimes.com:NEW DELHI: A ministerial group on Monday deferred a decision on freeing petrol and diesel prices from government control for want of quorum, but discussed the impact of such a move on inflation. Freeing petrol and diesel prices would mean an up to Rs 3.50 a litre hike in rates of these fuels, and this could send wholesale prices-based inflation up by 1.4 percentage points. Annual inflation was 9.59 per cent in April, mainly on account of high food prices. "We had a very good meeting but because of ministers not being present, no decision was taken. We will meet again soon," oil secretary S Sundareshan said after the meeting chaired by finance minister Pranab Mukherjee. Besides Mukherjee, the meeting was attended by Planning Commission deputy chairman Montek Singh Ahluwalia, fertiliser minister M K Alagiri, oil minister Murli Deora and cabinet secretary K M Chandrasekhar. Railway minister Mamata Banerjee, agriculture and food minister Sharad Pawar, road transport minister Kamal Nath and power minister Sushilkumar Shinde were not present. The oil ministry made a presentation to the eGoM on the recommendations of the Kirit Parikh Committee that suggested freeing fuel prices from government control. Oil companies have been selling fuel at less than the imported price and as a result suffer huge losses. It was noted at the meeting that under-recoveries of oil marketing companies on account of current price structure and burden faced the government by way of compensating the companies during the period 2003-04 to 2009-10 was in excess of Rs 3.45 lakh crore. The possible inflationary impact of rise in the prices of petroleum products was also discussed. Diesel, which is currently sold at a discount of Rs 3.49 a litre, is the nation's most consumed fuel that is used in transport sector and hence has inflationary impact. Petrol in Delhi currently costs Rs 47.93 a litre, while diesel is priced at Rs 38.10 a litre. State-owned Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum currently lose Rs 203 crore per day on selling fuel below imported cost. The eGoM will be meet again soon, but no dates were given for the next meeting.
Crucial meeting on hiking fuel prices today evening
Monday, 07 June 2010
07 June 2010;hindustantimes.com:New Delhi:Transport fuel prices in India may rise by up to Rs 3.5 per litre if a high-power group led by Finance Minister Pranab Mukherjee that meets in New Delhi on Monday evening permits state-run oil firms to charge market rates for such products. According to officials, also on the cards could be a hike in prices of kerosene and cooking gas, when the empowered group of ministers meets at 4.30 pm at North Block. Petroleum Minister Murli Deora, who is a member of this empowered group of ministers on fuel pricing, has already briefed Prime Minister Manmohan Singh and Mukherjee on the issue ahead of Monday's meeting. Both the finance and oil ministries now feel large subsides on fuels are unsustainable and want action taken on the Kirit Parekh Committee report that has favoured the freeing of transport fuel products pricing for oil marketing companies, officials said. "The decontrol of fuel pricing - at least for petrol and diesel - now looks certain," an official said, but conceded that some constituents of the United Progressive Alliance (UPA) government, notably the Trinamool Congress, were opposed to such moves. The meeting comes against the backdrop of the oil ministry's estimate that under-recoveries on fuels - the industry jargon for selling fuel products below cost - have risen to an alarming Rs 72,000 crore ($16 billion). International crude oil prices rose from $28 per barrel in 2003 to $147 per barrel in 2008 and now quotes at around $75 per barrel (159 litres make a barrel), putting major burden on government resources, as also on state-run oil firms. The group also includes Agriculture Minister Sharad Pawar, Chemicals and Fertiliser Minister M.K.Azhagiri, Railways Minister Mamata Banerjee, Road Transport Minister Kamal Nath and Planning Commission Deputy Chairman Montek Singh Ahluwalia. Oil marketing companies had to contend with under-recoveries of Rs 46,051 crore last fiscal, for which the government provided them assistance of Rs 26,000 crore, while the upstream oil companies contributed around Rs 14,430 crore. The balance had to be absorbed by the oil marketing companies. During this year, the government has already approved prices of transport prices to be raised twice, so that the fuel subsidy bill does not shoot up from the Rs.90,000 crore ($20 billion) budgeted for the current fiscal. In the federal budget for this year, presented Feb 26, the finance minister hiked petrol and diesel prices by Rs 2.71 and Rs 2.55 a litre, respectively. Then July 2, their prices were raised by Rs 4 and Rs 2 a litre in that order. As a result, petrol in the national capital, for example, costs Rs 47.93 per litre, while diesel costs Rs 38 10 per litre.
Private fuel retailers to make positive margin on sales after deregulation
Sunday, 06 June 2010
07 June 2010;business-standard.com:Kalpana Pathak:Mumbai: Essar Oil (EOL), Reliance Industries (RIL), Shell Petroleum and state-run Mangalore Refineries and Petrochemicals (MRPL) have, at present, one wish in common — making positive margins on the sale of auto fuel and to scale up their fuel retail outlets. These companies are waiting for the government to take a final decision on deregulation of fuel prices, which would not only allow them to regain their market share in fuel retailing but also help them make a gross margin of Rs 1,000 per kilolitre. At present, the gross margin on sale of every litre of auto fuel is zero. Post deregulation, it would be a rupee per litre. Net margin would be 40p on each litre sold. Essar Oil, which has 1,341 outlets operational, is selling petrol and diesel at Rs 4 and Rs 2.50 a litre, respectively, in all states, except Gujarat and Karnataka. The company plans to scale up its retail outlets to 1,700 by March 2011. But, if the prices are deregulated, the company says it might be able to achieve the target by this December. LEVEL FIELD “We had recommended that there should be total freeing of petrol prices, while in diesel, we welcome total decontrol, in a phased manner. The outcome of Monday's meeting (of the empowered group of ministers) will decide the pace of our ramp-up. Private players are not in the market due to government's fuel pricing policy. A level playing field will help firm up their market presence,” said an Essar Oil official. It has two per cent market share in the retail fuel segment. Analysts say the proposed price deregulation of auto fuels, if implemented, would be positive for RIL and EOL. “Fuel price deregulation could lead to nil underrecoveries on auto fuels, as the entire burden would shift to the consumers. While deregulation of the petrol prices is a possibility, chances of deregulation of diesel prices are less, considering its impact on inflation and given that 15 per cent of the total diesel consumption is for agricultural purposes,” said a Mumbai-based analyst. Sector analysts say RIL in particular, could ramp up its retail operations at a much faster pace. “RIL might take only a couple of quarters to regain its lost market share, as in the past, in a matter of less than four years, the company was able to ramp up its share in the diesel segment to 14 per cent,” said a Mumbai-based analyst who tracks RIL closely. RIL, in its fourth quarter results, said it had over 650 retail outlets operational. It has 1,400-odd retail fuel stations across the country and today has less than one per cent of retail market share. Shell India, which has 40 of its total 80 retail outlets operational, might also look at re-opening the balance outlets. PSU REFINER AS AVID On the other hand, standalone refiner MRPL, a subsidiary of state-controlled Oil and Natural Gas Corporation, is waiting to expand its presence in the petroleum retail business as soon as the government allows the linking of petrol and diesel sales to market prices. MRPL has two retail outlets operating under the HiQ brand. It has an approval in place since 2006 from the Union government to set up 500 retail outlets. The government had asked it to put its plans on hold and was firm that it would not give any compensatory bonds (for retailing petro fuels below cost price) to MRPL, though it was a government company. MRPL says in view of heavy underrecoveries, it has been treading cautiously on setting up retail outlets. Each new outlet would cost over Rs 2 crore. The company would follow the dealer-owned and operated pattern. "On the advice of the ministry, we had put our retail plans on hold. But, with the government planning to free retail fuel prices from its control, we might review our retail plans," a senior executive from MRPL told Business Standard. The Kirit Parikh committee on the subject, in its report, had recommended market-determined pricing for petrol and diesel and linking the price of domestic LPG and kerosene distributed through the Public Distribution System (ration shops) to the increase in per capita gross domestic product and agriculture GDP, respectively. It had also suggested a partial increase of Rs 6 a litre on kerosene and Rs 100 on every LPG cylinder. It also proposed a 20 per cent reduction in kerosene allocations for the PDS. “Anybody in the business would like to reach the end-user. Our plans to be in marketing remain. Much will depend on what the EGoM decides in the meeting,” said an MRPL official.
Apollo in talks to supply tyres to Volkswagen in Europe
Sunday, 06 June 2010
06 June 2010;deccanherald.com:Cologne (Germany): India's Apollo Tyres is gearing up to supply tyres to German car maker Volkswagen in Europe as it looks to expand its global footprint. "Recently we have gone into VW (Volkswagen), supplying tyres for the cars they are launching in India and we are in discussion to supply tyres to them in Europe," Apollo Tyres Managing Director Neeraj Kanwar said. The company is also looking at leveraging from Dutch firm Vredestein, which it acquired last year for Euro 36 million, for supplying tyres to Volkswagen. Vredestein is already supplying to VW. "Now we will talk about two brands (Vredestein and Apollo) to VW," Apollo Vredestein Chief Marketing Officer Marc Luyten said.The move is part of its strategy to enhance its global footprint as it eyes to achieve a turnover of USD 5 billion in the next five years. The company said it plans to enter South Africa and Latin America through both organic and inorganic route. "We are targeting to reach USD 5-billion-mark turnover in the next five years as we expand globally and ramp our capacities," Apollo Tyres chairman Onkar S Kanwar said. Last week, the company launched its main brand Apollo in Europe with plans to sell 3.5 lakh tyres this year particularly in Germany, Britain, the Netherlands and Italy in the initial phase. "Our current range, catering to the small and mid-size segment, will meet the growing demand in Europe. We will be available only at established retailers. We will not walk the wholesale route," Kanwar said. He said the company would be supplying tyres to the European markets from its Baroda plant. Also, some of the tyres meant for the domestic market would be produced at its Vredestein facility in the Netherlands, which was acquired last year. Apollo is mainly into the replacement tyre segment that accounts 80 per cent of its overall business. It had started supplying tyres to the original equipment manufacturers (OEMs) five years back. "We are very replacement oriented company across various zones...Only five years ago we went into the OEMs segment in India. Today we supply to all the top automotive industries and MNCs in India," Kanwar said.
06 June 2010;timesofindia.indiatimes.com:Debasish Roy: General Motors India has registered an impressive growth of 61 per cent in sales in May 2010, compared to the corresponding period last year. It sold 8,225 units in May 2010 against 5,109 units in May last year. The May 2010 sales comprise of 2,812 units of the Chevrolet Spark, 2,296 units of Chevrolet Beat, 1,418 units of the Chevrolet Tavera, 854 units of the Cruze, 396 Units of Chevrolet Aveo, 312 units of Chevrolet Aveo U-VA , 84 units of the Chevrolet Captiva and 53 units of Chevrolet Optra. The increase in the sales was primarily driven by the tremendous response to the extremely popular and much sought after Chevrolet Beat, Cruze and Spark. The Chevrolet Beat and Cruze have become the industry benchmarks in their respective segments and a winner among consumers in India, with its best-in-class design, performance and other product attributes. Chevrolet Spark continues to register impressive sales, clearly validating it as the most sought after mini car in its segment in terms of styling, performance , fuel efficiency, value for money proposition and other product attributes. Commenting on the performance , P. Balendran, vice president, GM India said, "We are excited by the continued overwhelming respo nse to Chevrolet Beat, Cruze and Spark. Introduction of best-insegment cars from the 300 series, increase in customer outreach through distribution network, our unique value proposition like Chev rolet Cashless Ownership offer and our promise to deliver quality and performance are the factors that have led to the impressive sales.” GM India recently launched the Chevrolet Aveo CNG in Ahmedabad. This launch is a testament to the importance that GM India attaches to green technology and environment friendly mobility solutions. This new offering is expected to appeal to both individuals and fleet customers due to the lower operational cost and expansion of the CNG stations footprint across the country. It may be recalled that the company has ramped up production by adding the second shifts at Halol and Talegaon plants recently to meet the increased demand of its products. The company is also rapidly expanding its sales and service network to support the increasing market demand of its cars. It intends to take the network to 300 sales points and an equal number of authorized service outlets by the end of this year from the current 206 sales points and 200 authorized service outlets across the country. General Motors India has completed 14 years of operation in India. GM India started its journey in 1996 and now offers products under the Chevrolet brand, which was introduced in India in 2003. Chevrolet had already emerged as one of the fastest growing automotive nameplates in India. GM India produces the Chevrolet Captiva, Chevrolet Optra, Chevrolet Cruze, Chevrolet Aveo, Chevrolet Aveo U-VA , Chevrolet Spark, Chevrolet Beat and Chevrolet Tavera for sale in India and operates state-of-the-art manufacturing facilities in Halol, Gujarat and in Talegaon, Maharashtra. Demand is sitting right there but the company has to go and grab it. General Motors India seems to be doing just that.
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