Oil Ministry's gas pooling move criticised by industry
Sunday, 15 May 2011
15 May 2011;business-standard.com:New Delhi: Oil Ministry's move to ask domestic natural gas users to subsidise costlier imported LNG has come in for sharp criticism from industry bodies who said the plan not only violates competitive market practices but is also against interest of domestic gas producers. CII and Association of Oil and Gas Operators (AOGO) have even questioned the constitution of an inter-ministerial group (IMG) saying panel is loaded with directors or promoters of private sector Petronet LNG Ltd which will be the beneficiary of the plan. The IMG headed by Planning Commission Member Saumitra Chaudhri includes Petronet LNG CEO and its representatives of its principal promoters gas utility GAIL India and ONGC. Also, a Joint Secretary in the Oil Ministry, who is a director on Petronet board, is also part of the IMG, thereby loading the panel with people who are in favour of the move. An inter-ministerial group typically comprises only representatives of various ministries but in case of the IMG looking at subsidising costlier imported LNG by making consumers of cheaper domestic natural gas pay more, includes three board members of private firm, Petronet, they said. The panel was constituted after Petronet LNG, India's largest liquefied natural gas importer, contracted LNG from Australia at a price that is four times the rate at which most of the natural gas produced from domestic field is sold. The plan is to average out the two prices, to have a uniform rate for both the gas. CII and AOGO - a body representing almost all of the oil and gas explorers and producers in the country - sent in their separate comments on pooling of gas price to IMG members. AOGO said the Oil Ministry had in early 2010 commissioned a report by Spanish firm Mercados on pooling of gas. "The trigger for the same is not in public domain. Various stakeholders were asked to respond. Reports suggest that most of the stakeholders had reacted negatively to the proposals in the Mercados report." Stating that the committee under Chaudhri is second step in that direction, it said "we are not clear whether the committee is going into the merits of pooling, or, whether the need for pooling is a 'done deal' without any debate and only the modalities of its implementation." AOGO said pooling of gas price will undermine government commitment of allowing gas producers to discover market price. "By pooling for the first time, we will be extending the subsidy beyond national borders ie subsidise the international LNG/gas producers for increasing their share in Indian markets," it said. Also, as true cost of LNG shall be masked, there shall be no incentive to improve purchase, transport or supply efficiencies.
Oil firms slash jet fuel price by over 2.9 per cent
Sunday, 15 May 2011
15 May 2011;deccanherald.com:New Delhi: In the first reduction in more than seven months, state-owned oil companies today cut jet fuel price by over 2.9 per cent after international oil rates cooled off from two-year high. Oil companies reduced ATF (air turbine fuel) price by Rs 1,766 per kilolitre or 2.9 per cent, to Rs 58,794 per kilolitre in Delhi, an official of Indian Oil Corporation said here, adding prices are effective from midnight tonight. In Mumbai, ATF price has been reduced by Rs 1,827 to Rs 59,602 per kilolitre, the official said. The reduction in ATF price has come after 14 successive hikes since October, 2010, when international crude oil prices started soaring. The ATF price in Delhi on October 1, 2010 was Rs 40,728.52 per kl. The rates were increased by Rs 19,831.48 per kl, or 48.7 per cent till April 30, when last price hike was announced. No comment could be immediately obtained from airline companies on the impact of the price reduction on passenger fares. Fuel cost accounts for 40 per cent of the airlines' operating cost and rates vary from airport to airport depending upon the local sales tax. Indian Oil Corp and its sister public sector retailers Bharat Petroleum and Hindustan Petroleum revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.
Hyundai Motor eyes big on rural markets with small car
Sunday, 15 May 2011
15 May 2011;timesofindia.indiatimes.com:HYDERABAD: Hyundai Motor India (HMIL), the second-largest carmaker in the country, is betting heavily on its yet-to-be-launched small car to penetrate into the rural market, a top executive of the company said. According to Y K Koo, Senior Director (Sales and Marketing) HMIL, the small car will be launched in the first half of next year and the company has no immediate plans to export the car. "We are planning to launch it in the first half of next year. The car will be manufactured in Indian plant. HMI is very strong in compact car segment. With this launch, we hope to dominate the rural market also. That is our strategy. If we have a small car it is easy to penetrate into the rural market," Yoo said on the sidelines of launch of Fluidic Verna in Andhra Pradesh market. To a query on market share, he admitted that the brand is slightly losing sheen to the competitors. He, however, was quick to add that the situation arose as there was no new vehicle launches in 2010. "We did not have any new product last year. But our competitors like Volkswagen , Ford and Nissan have all launched new vehicles. Even Maruti launched a new version of Alto. We don't have any new launches. Still our market share is at 19.7 per cent. The previous year it was 20.2 per cent." The Korean car maker said they are willing to reduce exports in order to meet domestic demands and currently have no plans to increase plant capacity from the present 6.25 lakh units per annum. Currently, Hyundai exports around 2.25 lakh cars from India to other countries. "We launched a new Verna this year. To regain the market share of 20 per cent is our target for this year (Jan to Dec). With new Verna, we aim to sell 4,000 to 5,000 units per month," Yoo said said. "New product will always create new demand," he said, adding that going forward Hyundai will launch at least two new vehicles per year to stay ahead of the competitors.
15 May 2011;timesofindia.indiatimes.com:NEW DELHI: A ministerial panel is to decide on hiking fuel prices next week, local media reported on Sunday, a day after state-run oil firms raised petrol prices by a record amount as the government risks fuelling high inflation as it battles to bolster public finances. The group of ministers tasked with discussing a rise in diesel, LPG and kerosene prices had previously postponed its meeting as the government looked to defer a decision until after the results of recent state elections. "A decision will be taken on raising prices of these items when the (panel) meets next week," finance minister Pranab Mukherjee, who chairs the panel, told reporters. State-run oil firms raised petrol prices by 5 rupees a litre at midnight on Saturday, two days after the ruling Congress party-led coalition survived a major voter backlash in five state elections. Last June, the government allowed state-run oil firms to fix the price of petrol but continued to control the prices of diesel, kerosene and cooking gas to protect the poor and try to tame inflation. Headline inflation in India stands at just under 9 percent. Asian rival China last month raised gasoline and diesel prices by about 5 percent. One oil ministry source said last week the government could consider raising diesel prices by more than 4 rupees a litre, the steepest hike in about a decade, to counter the impact of high global crude prices. Even a small rise would help limit the government's fuel subsidy burden to a budgeted $5.2 billion for 2011/12 and help it meet its fiscal deficit target of 4.6 percent.
Current Petrol (ULP) Price per liter in INDIA & USA cities
Saturday, 14 May 2011
Bangalore- 70.40; Chennai- 68.34; Delhi- 63.39; Hyderabad- 70.00; Kolkata-67.27; Mumbai- 67.00 (approx. Prices, Cities are listed alphabetically, Prices may be a little higher depending on corresponding increase in local tax percentage )
Los Angeles- 40.59 Rs/l; New York City- 41.63 Rs/L; San Francisco- 40.59 Rs/L; Phoenix- 36.96 Rs/L. (approx. Prices)
14 May 2011;deccanherald.com:New Delhi: Twenty-four hours after the Congress-led United Progressive Alliance (UPA) government helped itself retain the mandate in Assam and wrest power from rivals in West Bengal and Kerala, it inflicted a severe sqeeze on household budgets on Saturday. The state-owned oil marketing companies (OMCs) hiked retail price of petrol by Rs 5 per litre in Delhi, after the UPA government signalled the end of its “unwritten” instruction not to increase the price until the completion of a tough round of Assembly elections. In Bangalore, the petrol price went up by Rs 5.47 per litre and the revised price is Rs 71.10. The hike, perhaps the highest in recent years, came into effect from midnight. As such, the OMCs are free to revise price once every fortnight since the government announced the petrol price deregulation last June. However, there has been no revision since January 15 and privately top officials in OMCs attributed the non-revision to an “unwritten” instruction from the government in view of the assembly elections in West Bengal, Tamil Nadu, Kerala, Assam and Puducherry. The first announcement on the hike came from Indian Oil Corporation. “The retail price of petrol has been hiked by Rs 5 per litre,” IOC chairman R S Butola announced on Saturday evening. Taking a cue from the IOC, the other two state-owned OMCs–HPCL and BPCL–also announced hikes ranging from Rs 4.99 to Rs 5.01 a litre. There could be further upward revisions soon. The OMCs maintained that they were losing nearly Rs 10 per litre on petrol by not aligning the retail price with global crude price levels. According to them, the retail price has been fixed on the basis of crude oil price at the rate of $95 per barrel whereas the basket of crude oil that India imports is now averaging nearly $110 a barrel. Hence, according to them, there is still a huge “under-recovery.” Consumer’s burden While giving its nod for the hike, the Petroleum Ministry is learnt to have directed the OMCs not to pass the entire burden to consumers in one go but to stagger the hike in phases, sources said. “Before today’s (Saturday) revision, the hike needed to make domestic price align with international crude prices was Rs 9.50-10 per litre but we have chosen to hike the price by just half of that,” a highly placed source in the IOC said. The UPA government, however, continues to face a difficult political dilemma over hiking the prices of diesel, kerosene and domestic cooking gas (LPG). The pricing of these products was not decontrolled last year. The state-owned OMCs claim that they were currently incurring a loss of over Rs 16 per litre on diesel, Rs 29.69 a litre on kerosene and Rs 329.73 per 14.2 kg domestic LPG cylinder. The hike drew instant criticism from the BJP and the CPM. The BJP said it would fight against the measure “inside and outside Parliament” while the CPM, which has just suffered an unprecedented electoral debacle in West Bengal and Kerala, called it hypocrisy. “The petrol price hike exposed the failure of the economist Prime Minister Manmohan Singh,” BJP spokesman Ravi Shankar Prasad said. CPM leader Sitaram Yechury said the price hike was highly condemnable. “This is a cruel hoax on the common people.”
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