04 Feb 2010;economictimes.indiatimes.com:Sanjay Dutta & Pradeep Thakur:NEW DELHI: After food items, it is the turn of motor fuels to burn a bigger hole in your pocket. An increase of at least Rs 3 a litre in petrol and Re 1 in diesel prices appears very likely around the budget as the government nears the end of its capacity to extend a financial lifeline to state-run oil marketers. A panel under former Planning Commisson member Kirit Parikh, set up to review the petro pricing regime, set the stage on Wednesday for the upward revision recommending removal of government control over petrol and diesel prices, raising cooking gas price by Rs 100 per cylinder and kerosene by Rs 6 a litre. Government is unlikely to muster courage to fully accept the recommendations on kitchen fuels, but a rise in motor fuel prices looks unavoidable. Besides, there is also the possibility of a small hike in cooking gas prices in phases. Oil minister Murli Deora said he would take the Parikh report to the Cabinet in a week, amid indications of a convergence of view in the government that a hike could not be put off any more. "Very likely," said sources in the finance ministry when asked about the hike. Two similar committees before the Parikh panel — under former RBI governor C Rangarajan and former cabinet secretary and Plan panel member B K Chaturvedi — too had suggested freeing motor fuel prices. But unlike in the past, there are three key factors that could force the government to bite the bullet this time — perhaps with the precaution of a calibrated cap on the extent oil firms can raise prices of diesel since this is a key input for farmers. The main factor forcing the government's hands is the rising deficit and cost of economic stimulus, farm support prices besides social sector spendings. The finance ministry has put its foot down on giving any more dole. More so, when its hope of a significant cash flow has been dashed now that the auction of 3G radio spectrum is not happening this fiscal. And whatever money is to flow in from follow-on sell-off in NTPC will go towards bridging the deficit. All other offerings will happen in the next fiscal. This leaves little scope for subsidising motor fuels.Politically speaking, this is the right time to administer the bitter pill, as state elections are months away. Bihar elections are scheduled only in November. The window can be used for letting any political storm over a hike blow over. Still, there are concerns of an adverse fallout, especially at a time when food inflation remains high. Government, however, is taking solace from the calculation that a hike of Rs 3 a litre for petrol and Re 1 a litre for diesel will have only a marginal impact on overall inflation.
04 Feb 2010;economictimes.indiatimes.com:TOKYO: Toyota Motor has been ordered by Japan’s government to investigate brake-related problems with its latest Prius hybrid, adding to company Toyota Prado Diesel woes following the recall of millions of vehicles in overseas markets. The transport ministry has received 14 complaints about the model’s brakes since it was introduced in May, said Masaya Ota, an official in the recall division. The ministry contacted the company about the issue in August, said Shunsuke Miyaoka, who works in the same division. An investigation of the Prius, the world’s best-selling hybrid vehicle, may further damage Toyota’s reputation after recalls of at least 7.6 million vehicles globally, including one that caused a halt of US sales and North American production of eight models. The Prius, Japan’s top-selling model last year, is not among vehicles for which sales were halted in the US. “The Prius is Toyota’s flagship model, its key to the future,” said Ashvin Chotai, MD of London-based Intelligence Automotive Asia, a consulting company. “If that model gets tainted, that would suggest Toyota’s crisis has moved on to the next level.” Toyota spokeswoman Ririko Takeuchi said the government had ordered the investigation. She declined to say when officials contacted the company. The latest Prius model isn’t included in overseas recalls for repairs related to unintended acceleration. In the US, 2004 through 2009 Priuses were part of a 5.35-million vehicle recall for floor mats that may trap gas pedals and cause unintended acceleration. The Prius wasn’t part of a separate US recall of 2.3 million vehicles because accelerator pedals may stick. The US National Highway Traffic Safety Administration has received more than 40 brake-related complaints about the 2010 Prius. There is no announced investigation. Steve Wozniak, co-founder of Apple, said in an interview that his 2010 Prius had accelerated unintentionally and that Toyota and the US agency hadn’t responded to his complaints. Japan’s transport ministry has asked other carmakers to investigate problems and complaints it received about acceleration and brake problems, Ota said. “This is something we do on a regular basis.” The 14 complaints in Japan may not be statistically significant, Intelligence Automotive’s Chotai said. The Transport Ministry in December reported a total of 13 accidents in 2008 and 2009 related to gas-pedal and brake issues in vehicles from carmakers such as Mitsubishi Motors, Mazda Motor, Daihatsu Motor and Nissan Motor. “Maybe we need more evidence,” Chotai said. Toyota shares fell 5.7% to 3,400 yen in Tokyo. The carmaker’s US sales in January dropped 16% from a year earlier to a 10-year low. The latest Prius has drawn more than 100 complaints related to brakes in the US, Kyodo News reported. The report, which cited the National Highway Traffic Safety Administration, didn’t provide details about the complaints. Takanori Yokoi, a spokesman for Toyota in Tokyo, said he couldn’t immediately confirm or deny the report when reached by phone. Karen Aldana, a spokeswoman for the US safety agency, didn’t return a call to her mobile phone or respond to an e-mail message sent after normal business hours. Toyota is not aware of any complaints stemming from the issue in Europe, said Etienne Plas, a Brussels-based spokesman. More than 29,000 of the latest Prius model, of the same make as the Japanese and US versions, were sold in Europe between June and December last year, according to Plas. Denso, a Japanese auto-parts maker, doesn’t make the electronic control systems related to the complaints about the Prius being reported in Japan, said spokesman Goro Kanemasu. He declined to name which models Denso’s electronic throttle control system is used in.
Free auto fuel pricing, raise LPG rates by Rs 100/cylinder: Panel
Wednesday, 03 February 2010
04 Feb 2010;dailypioneer.com:New Delhi: Kirit Parikh committee, appointed by Government for reforming the oil sector, on Wednesday suggested not only freeing petrol and diesel prices but also called for raising LPG rates by a steep Rs 100 per cylinder and kerosene by Rs 6 a litre. If these recommendations are accepted, prices of petroleum products will shoot up sharply. But chances are unlikely as the country is already battling high inflation. At current global crude oil prices, deregulating auto fuel pricing would result in a hike of Rs 4.72 a litre in petrol prices and a rise of Rs 2.33 per litre in diesel rates. Considering the cascading effect an increase in diesel rates would have on food prices, this recommendation may not be accepted while there seems to be a consensus between ministries of finance and petroleum on freeing petrol prices. “Current petroleum product pricing policy of the Government is not sustainable,” Kirit Parikh, who headed the panel, which also included Finance Secretary Ashok Chawala and Oil Secretary S Sundareshan, said after submitting the report to Petroleum Minister Murli Deora. At present, kerosene is sold at a discount of Rs 18.06 a litre and domestic LPG cylinder at Rs 287.59. The remainder of the gap between retail price (after the suggested increase) and the imported cost of fuel should be met by the Government and by upstream firms ONGC and Oil India. Parikh, did not see much inflationary pressure because of the measures suggested saying the steps like increase in tax rates needed to bridge the fiscal gap between the retail price and actual cost was unsustainable. Deora gave enough hints that the Government will not take any decision in haste saying the report will be “processed” and presented to the Government in a weeks time. Sources said the Government may accept the recommendation of freeing petrol price but may adopt a more calibrated approach on diesel as a rise in transportation cost will further fuel food inflation. A hike in LPG rates was expected but not as steep as suggested while kerosene may not be touched. Petrol in Delhi costs Rs 44.63 a litre while diesel is priced at Rs 32.87. A 14.2-kg LPG cylinder costs Rs 281.20 and and kerosene is priced at Rs 9.09 per litre. Without any increase, Indian Oil, Bharat Petroleum and Hindustan Petroleum are estimated to lose Rs 46,030 crore in revenues this fiscal. As per the current policy, the revenue loss on petrol and diesel is met by upstream firms like ONGC. Of the Rs 31,574-crore revenue loss expected on LPG and kerosene, the Government has so far given Rs 12,000 crore. He said hikes suggested by the panel in kerosene were in step with the rise in rural per capita income since the last increase was in 1999 (a hike of Rs 2 per litre to Rs 9.09.) The rise recommended in domestic cooking gas rates was also in proportion to the rise in urban per capital income. Freeing auto fuel prices, which would promote competition as the present policy has virtually driven private sector out of business, has been suggested after considering its impact on users, he said and added users had the capacity to pay. “This is a good time to free prices because petrol and diesel prices increases will be very low,” Parikh said. “You would not wait for crude to touch $120 a barrel again.” “There is no escaping from passing on the international price (to consumers),” he said. The committee suggested that LPG and kerosene prices can be raised every year in step with the growth in per capital agricultural GDP at nominal rates and per capita income respectively. Parikh said the fiscal deficit-led inflation (rise in prices of essential commodities caused because of the government having to take fiscal measures like tax hikes and borrowings) effects everyone including the poor and farmers. Freeing petrol and diesel prices will not only promote competition but also lead to more equitable sharing of inflation burden, affecting mostly people who can pay. “We have examined the implications of increase in retail price of diesel on various groups of consumers and do not find any compelling reason to subsidise them,” the report said. “The present system of price control on petrol and diesel in particular has resulted in major imbalances in the consumption pattern of petroleum products in the country, and has put undue stress on finances of the PSU oil marketing companies as well as of the Government,” he said.
Parikh panel for steep hike in fuel prices, deregulation
Wednesday, 03 February 2010
03 Feb 2010;timesofindia.indiatimes.com:NEW DELHI: In a path-breaking report, an expert group headed by Kirit Parikh on Wednesday suggested freeing of petrol and diesel prices and raising LPG rates by Rs 100 per cylinder and kerosene by Rs 6 per lite. "Current petroleum product pricing policy of the government is not sustainable," Parikh said after submitting the report to Petroleum Minister Murli Deora. Freeing petrol and diesel prices would result in an increase of Rs 3 per litre in petrol prices and Rs 3-4 in diesel prices. At present, the government does not allow state-running fuel retailers to fix petrol, diesel, kerosene and LPG prices in line with international cost, resulting in huge revenue losses for the companies and subsidy burden on government. Parikh said petrol and diesel pricing should be left to the competitive market process, while government should continue to subsidise PDS kerosene and domestic LPG to some extent. Deora said that the report will be processed and will be put in before the government or the Cabinet in a week. The committee also pegged the losses of state-run oil marketing companies at Rs.40,000 crore on account of having to sell transport fuels at below cost. "There is no way we can continue with the current pricing policy," said Parikh while discussing the recommendations here.
03 Feb 2010;business-standard.com:Mumbai: Pune-based Bajaj Auto has moved up on reporting over-two fold jump in motorcycle sales last month. The stock is trading at Rs 1965, stronger by Rs 30 or 1.5%, on the BSE. The shares had opened at the day's low of Rs 1959 and have touched a high of Rs 1975 thus far. The company sold 2,32,939 units in January this year as against 1,09,666 units in the same month last year, Bajaj Auto (BAL) said in a statement. BAL attributed the monthly jump to an all-time sales record of its Pulsar model, of which 71,970 units were sold during January. The company also sold 92,035 units of its newly launched 100cc Discover DTS-Si during the month.
BMW to lease cars for specific periods to customers
Tuesday, 02 February 2010
03 Feb 2010;economictimes.indiatimes.com:Chanchal Pal Chauhan:NEW DELHI: Luxury cars will become affordable with BMW India planning to lease out cars to individual customers not preferring outright purchase. The German car company will lease such cars for specific periods and also take them back for re-sale. BMW, which edged out its global arch-rival Mercedes-Benz to attain leadership in the domestic luxe car market in 2009, is looking to consolidate its market share in the 9000 units-a-year luxury car market. The lease business will also help the company build inventory for its used car business - the BMW Premium Selection - to be launched by the year end. Under this, BMW will sell cars returned by customers after some years of use as well as the company-owned fleet used by its own executives. The company with re-furbish these old cars and sell them under its own warranty and also provide complete service backup through its dealers just as it does for its new cars. BMW India president Peter Kronschabl told ET, “In the three years of operations we have realised that a large number of customers want to own a BMW product, but not exactly buy it at the regular ex-showroom price. We are leasing to companies but this is the first time we are tapping individual customers.” BMW sold 3,619 units against Mercedes Benz’s 3,247 in 2009. It will also invest $50 million in its auto loan business — BMW Financial Services — to provide retail finance to BMW buyers and dedicated finance to dealers. The business will also provide automotive insurance cover to customers with a local partner. “ Used cars customers would be treated at par with new car owners.’’ BMW has also announced plans to manufacture its entry-level sports utility vehicle (SUV), the X-1 at its Chennai factory by the year end. The new SUV will be the cheapest car from the BMW stable and will be positioned below the 3Series which comes at Rs 27 (ex-showroom) Delhi.
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