27 May 2011;hindustantimes.com:Mumbai/Thiruvananthapuram: Oil companies resumed supply of jet fuel to national carrier Air India on Friday after huge unpaid bills led to the cancellation of four flights earlier in the day. "We have reached an understanding on the issue. We would be paying for our jet fuel requirements and also expect further relief from t he ministry of civil aviation in this regard," senior Air India operations official said. According to the Mumbai-based official, the understanding on fuel supply was reached after senior officials from Air India and oil marketing companies discussed the issue, which had till afternoon grounded four domestic and international flights. "High-level parleys were conducted between two-sides to reach the understanding," the official said. Earlier, the flag carrier was placed on a cash-and-carry basis by the three state-owned oil marketing companies, including Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL), for the unpaid fuel dues. "We have placed Air India on cash-and-carry basis. They would now pay us every time they buy jet fuel from any of the three companies," senior official with a public sector oil firm said. Currently, the airline has a consolidated fuel debt worth Rs.2,000 crore to the three oil firms. Air India confirmed that it will be paying the required amount to buy jet fuel from the oil firms. "We will be paying them for our immediate needs," Air India official said. However, aviation experts doubt the viability of the airline to operate on such payment schemes as it is already under tremendous financial burden. The flag carrier has a daily requirement of Rs.16 crore worth of Aviation Turbine Fuel (ATF) of jet propellant-1 (JP-1) type. Four Air India flights on domestic and international routes were cancelled early on Friday morning as oil firms refused to provide jet fuel and demanded that the carrier pay cash for the ATF. "Our operations officials were asked to pay there and then. Now paying of such high amount requires senior authorisation, which takes time. That's why the four flights had to be cancelled." The four cancelled flights were two from Kochi and one each from Thiruvanathapuram (to Chennai) and Kozhikode (Air India Express flight to Muscat). "Two flights from Kochi - Air India Express flight to Sharjah and a domestic flight to Bangalore - have also been cancelled. But we are able to operate the Riyadh flight from Thiruvananthapuram via Kochi that is carrying 400 passengers," said the Air India official.
Oil cos threaten to stop jet fuel supplies to Air India
Friday, 27 May 2011
27 May 2011;timesofindia.indiatimes.com:NEW DELHI: State-owned oil companies have said they will resume fuel supplies after earlier stopping them to Air India after the cash-strapped national carrier repeatedly defaulted on payment of fuel bills. Air India was put on cash-and-carry from December, but the airline has not been able to pay for even its daily fuel purchases. The carrier were forced to slash its daily flights. On Friday, five domestic flights in the southern region were cancelled and one international flight from Thiruvananthapuram to Riyadh was cancelling following this notice, according to TimesNow. Oil companies last week sent a notice for stopping aviation turbine fuel (ATF) supplies to Air India at some airports like Calicut and Jaipur, officials said here. Air India owes Indian Oil Corp (IOC) about Rs 1,900 crore. IOC meets 63 per cent of Air India's jet fuel needs. The national carrier has run up an outstanding bill of over Rs 300 crore with Bharat Petroleum Corp Ltd (BPCL), while its dues to Hindustan Petroleum Corp Ltd (HPCL) are relatively small. Officials said Air India buys jet fuel worth Rs 18.5 crore per day from the three state oil firms, but it pays only Rs 13.5 crore. This led the oil firms to threaten to stop supplies of ATF beyond what Air India pays for. "Oil companies already incur huge losses on selling diesel, domestic LPG and kerosene way below their production cost and to expect them to sell ATF at subsidised rates is not acceptable," an official said. At a meeting called by Cabinet Secretary K M Chandrasekhar in March to resolve the payment impasse, Air India sought discounts similar to the ones given to private airlines. Oil companies give a Rs 1,600-1,800 per kilolitre discount to private airlines on promise of assured payment. After adding finance charges for a 90-day credit period, the discount comes to Rs 3,600 per kl. "Even if this discount is stretched to Rs 5,000 per kl, the Rs 18.5 crore per day fuel bill will not become Rs 13.5 crore. After including some more concessions, the fuel bill at best will come down to Rs 17 crore a day, a far cry from the Rs 13.5 crore paying capacity of Air India," he said. Officials said Air India was discussing only the payments for future ATF purchases and there was no word on how the state carrier will clear the past outstanding. "Air India talks of getting the same discounts as private airlines, but does it know that ATF purchases by airlines such as Jet Airways and Kingfisher Airlines are covered by a bank guarantee in case of default?", an official asked. Both Jet Airways and Kingfisher have brought down their outstanding to manageable levels and have provided bank guarantees to cover against any default.
27 May 2011;dailypioneer.com: Rakesh Bihari Jha:New Delhi: After entry of super luxury sports car brands in India like Rolls-Royce, Bentley, Lamborghini, Aston Martin, Bugatti Veyron, and Koenigsegg, to name a few, it was the turn of Italian super luxury carmaker Ferrari on Thursday to enter the country. “India is the 58th country for Ferrari. Though we should have been in India much before, time is just ripe for Ferrari. We hope to sell more than 100 cars in the next 2-3 years,” said Ferrari SpA Chief Executive Officer Amedeo Felisa, adding, “bookings for the cars start from today with the opening of the first dealership in the national capital. The second showroom will open in Mumbai in the second half of 2011.” After the booking, delivery might take 3-12 months depending on specifications and customisation level. Ferrari, which has sold over 6,400 cars across the globe in 2010, entered Indian market with popular models such as the California, 458 Italia, 599GTB Fiorano and the latest FF. While California is priced at Rs 2.2 crore and 458 Italia at Rs 2.56 crore, 599GTB Fiorano is tagged at Rs 3.37 crore. All prices are ex-showroom Delhi at prices starting from Rs 2.2 crore onward. When asked about which of those models could be a best seller for India, one of the officials, said: “California can be a great success in the country as it is more like a city car and can be used everyday, which is not the advantage with other models as their nature is different.” The company has appointed the Shreyans Group as its official importer in India. India already has over 50 Ferrari cars. “India is a country of 1.2 billion people and ideally we can sell our 10-15 per cent of total sales here in India. But it is still to take some time. Post earthquake China has emerged as the second largest market for Ferrai where we are selling over 600 cars per year,” added Felisa. When asked about global outlook of the company this year, he said: “Last year we sold over 6,500 cars and we hope to do better this year. This year, we expect to beat our best-ever sales of 6,700 units achieved in 2007,” he said.
Oil giants may put Rs 15,500 cr in Russia gas project
Thursday, 26 May 2011
26 May 2011;hindustantimes.com:Anupama Airy:New Delhi: In a bold attempt to secure a share in Russia’s gas sector, a consortium of ONGC Videsh, GAIL and Petronet LNG is preparing to invest around Rs 15,500 crore for a 15% stake in Russia’s independent gas producer Novatek’s $30-billion (Rs 1,35,000-crore) LNG project in Yamal peninsula. Novatek will retain 51% equity in the project while the balance 49% will be given to potential investors. France’s Total is also understood to be persuing a 20% stake in the project. A non-binding indicative bid for a 15% stake in the project is underway and, if successful, the Indian consortium will invest R15,500 crore for a 15% in the project, a company official close to the development told HT. “The 15% equity of this multi-billion dollar project (to be financed on a debt-equity ratio of 50:50) will be split between ONGC Videsh, GAIl and Petronet LNG as 7.5%, 5% and 2.5% respectively,” the official said. Global consultants including Gaffney Cline Associates (GCA), Poten & Partners (UK) Ltd (P&P) and Allen & Overy were appointed by the Indian consortium for conducting a due-dilligence of the project, besides preparing an indicative offer. A joint team comprising of representatives from OVL, GAIL and GCA also visited the data room in Tyumen, pertaining to upstream assets. “While Novatek has indicated the project cost to be $16 billion, our consultants have worked out the capex for upstream development and the LNG liquefaction plant as $30 billion,” the official said. The capacity of the plant will be 16.5 million tonnes per annum and the delivery of first LNG from Yamal is expected by 2016. “The Yamal LNG project will receive supplies from the South Tambeyskoye field located in the north east of the Yamal Peninsula and holds estimated reserves of 1256 billion cubic meters of natural gas and 52 million tonnes of oil,” he said.
27 May 2011;timesofindia.indiatimes.com:NEW DELHI: The ministerial panel on fuels under FM Pranab Mukherjee is expected to raise diesel and cooking gas prices on June 9. Diesel price is likely to be increased by Rs 2-3 a litre and cooking gas by about Rs 35 per cylinder. The increase in price of diesel, which is the main transportation fuel, is expected to push up cost of essential items, all goods that move on trucks as well as bus and taxi fares. A revision in diesel and cooking gas prices was in the offing since petrol price was jacked up on May 15 by Rs 5 a litre, the steepest-ever increase. The ministerial panel was expected to meet on May 11, the day after the last phase of polling was to get over in Bengal. But the government pushed the pause button in view of a see-saw in global crude prices after Osama bin-Laden's killing. The fluctuation in crude price in the intervening period has brought down the loss on a litre of diesel from a high of Rs 19 or so, when the price of Indian crude mix averaged nearly $121 a barrel before Osama was killed. Diesel and cooking gas prices were last revised in June 2010. The present pump price of diesel corresponds to around $70 a barrel of crude mix bought by the state-run refiners. That mix is ruling at $118 now. As a result, oil marketers are currently losing Rs 16.49 on every litre of diesel and Rs 329 on each cooking gas refill. The oil ministry will also push for an increase in the price of kerosene, politically the holy cow of fuels. The companies are losing almost Rs 30 a litre on the poor man's fuel, nearly 40% of which flows into the black market. The panel is unlikely to tinker with fuel taxes for fear of upsetting the government's calculations. Top finance ministry officials have, over the week, categorically ruled on reducing taxes to pare increase in fuel prices.
Aston Martins, Bugattis zoom along upcountry highways
Thursday, 26 May 2011
26 May 2011;economictimes.indiatimes.com:Lijee Philip & Chanchal Pal Chauhan: MUMBAI | NEW DELHI: Young, non-urban, super rich and anonymous - that's the profile of the typical customer buying luxury and super luxury cars that start at Rs 1.5 crore and go all the way up to Rs 20 crore. It's not only the well-heeled city slickers from business families and Bollywood who are lapping up Aston Martins, Bugattis, Maseratis, Ferraris and Koenigseggs. Rubber traders, marble traders, jewellery exporters, distillers and foundry owners from smaller cities and towns like Raipur, Kannur and Kolhapur are queuing up to buy these majestic machines. "This new breed of buyers wants to move up the value chain. They are aware of the brand and its equity and want the product to reflect their personality. These are customers who have created a lot of wealth and are not afraid to show it," says Ashish Chordia, a dealer for Ferrari and Porsche in India. Some 300 super luxury cars were sold last year, and that number is expected to double in the current year as more marquee car brands debut in the Indian market. The latest addition to that list is Pagani Zonda, a high-end niche Italian sports car with a mid-engine layout (the engine is placed between the rear and front axles) that will soon be available in the country. If much of the buying of such super sports cars is taking place outside the metros, it's because of the prosperity that resides in such pockets. In Kerala, for instance, rubber traders are riding a boom in rubber prices, which have spurted by 75% in the past year. "These traders and a host of mid-size rubber estate-owners are among the buyers of super luxury cars," says N Radhakrishnan, former president, Cochin Rubber Merchants Association. In Surat, it's the diamond traders who are eyeing the Aston Martins and Bugattis. "Diamond merchants have brought more than 30 cars worth more than Rs 1 crore each in a year," says Dinesh Navadiya, president, Surat Diamond Association. In Kolhapur, farmers are buying luxury cars - models in the Rs 50-60 lakh range. Younger customers for luxe brands "A lot of people have bought Audis, BMWs and Mercedes Benz cars," says Kiran Patil, chairman, Ghatge Patil Industries , a leading foundry unit in Kolhapur. The luxury car market has seen a dynamic shift with younger customers getting into the ownership bracket. The average age of these customers has come down to 33-34 years from 40-42 years a decade ago. "The new customers are young, demanding and looking for the latest models with the finest specs," Mercedes Benz director (marketing & sales) Debasis Mitra says. In November 2010, a group comprising industrialists, builders and doctors among others collectively booked 101 BMWs in Aurangabad. "Around 45% of the annual sales of some 15,000 luxury cars sold every year in India are now coming from such markets (non-metros)," says a senior official with BMW. Next stop after owning a BMW or a Merc: a super luxury car, of course.
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