20 Jan 2010;economictimes.indiatimes.com:Prabha Jagannathan:NEW DELHI: Your evening drink could become more expensive thanks to the government’s decision to implement fuel blending programme in earnest, even facilitating a far higher price for the commodity than earlier. To boot, ethanol, the key ingredient in potable alcohol, is likely to be in acute short supply due to sharp sugarcane production shortfall this year. The total ethanol availability in the current year (2009-10) is projected at 128 crore litres, leaving a deficit of about 160 crore litres. This compares with a deficit to 45 crore litres in 2008-09. The potable alcohol sector is the biggest consumer of ethanol, with consumption doubling from 2001-02. The chemicals industry is the second biggest consumer. After the Centre’s 5% Ethanol Blending Programme (EBP) got an aggressive kick-start this year from the food ministry, ethanol requirement for blending is likely to shoot up to around 85 crore litres in the current year from only 12 crore litres in 2006-07 and 32 crore litres in 2007-08. Accessing imports to bridge the deficit is difficult. Last week, Brazil cut the mandatory amount of ethanol mixed into gasoline to 20% from 25% after ethanol stocks fell, at the beginning of the new cane harvest season, and prices for the biofuel shot up to 67 cents per litre last week, the highest since July 2007. The aggressive thrust to blending comes despite sugar companies defaulting on ethanol supply in the previous round of contracts, triggering off questions from both the chemicals and the alcohol industry over the motive of boosting ethanol price at this juncture. Recent changes in the Sugarcane (Control) Order, 1966 have ensured that the sugar industry need not share its profits from ethanol production and co-generation of power with cane farmers, making it profitable for sugar companies to feed ethanol at high price to the EBP. There are also apprehensions that companies could start to produce ethanol directly from sugarcane juice in the thick of an acute cane shortfall year, in violation of the National Biofuel Policy strictures. The order also states that the EBP should be fed ethanol only after domestic sugar needs and ethanol needs of other sectors are catered to first. Yet, even during the peak sugar production years of 2006-07 and 2007-08, adequate ethanol was not available for fuel blending programmes, leading to deficits of 19 and 11 crore litres, respectively. “The green chemicals industry in India would face problems, resulting in significant job losses and losses of tax revenues. Moreover, forcing PSU OMCs to buy ethanol at inflated prices violating earlier contracts, would also result in the exchequer subsidising the OMCs for such purchases for an amount exceeding Rs 1,000 crore,” IndiaGlycol CEO Rakesh Bhartia told ET. The government recently paid dues of Rs 12,000 crore the oil industry to bridge losses. Despite the oilcos having the right, under the 2006 ethanol supply contract with sugarcos that includes a penalty clause, to extend the contract for supply of ethanol up to 2011, at the same price (Rs 21.50 a litre), they were pressured to float a new supply tender for a period of one year. Suppliers quoted for 30,000 crore litres less against a total requirement of 91,745 kilolitres by the oilcos for UP, with bids in the price range of Rs 27 a litre.
20 Jan 2010;economictimes.indiatimes.com:NEW DELHI: Consumers can breath easy as the government has no immediate plan to raise prices of petrol and diesel. A decision to increase fuel prices will be taken in February based on recommendations of the Kirit Parikh Committee, two senior officials in the oil ministry said. The committee, set up by the government to suggest a sustainable fuel pricing policy, is expected to submit its report by January 31. “There is no proposal to raise fuel prices as on date,” petroleum secretary RS Pandey said after the launch of Oil & Gas Conservation Fortnight-2010. Mr Pandey indicated that the decision of increasing fuel prices will be based on recommendations of the expert panel. “Let us see what decisions they (the committee) take...,” he said. The committee is expected to submit its report in less than a fortnight, he added. A fuel price hike is imminent with global crude oil prices have breached $80-a-barrel mark. State-owned fuel retailers — Indian Oil (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum (HPCL) — are losing Rs 5.40 a litre on petrol, Rs 3.65 a litre on diesel, Rs 17.23 a litre on kerosene and Rs 299 a cylinder on cooking gas. As on January 16, country’s largest fuel retailer IOC (which has over 50% market-share) is losing Rs 110 crore every day for keeping petrol, diesel, kerosene and cooking gas below the cost. “Based on the January 16 calculation, the three oil marketing companies (OMCs) may post Rs 47,400 crore revenue loss in 2009-10. The Rs 12,000 crore compensation offered by the finance ministry is far too less to keep the three OMCs financially healthy,” another official in oil ministry said requesting anonymity. The Rs 12,000 crore compensation offered by the finance ministry is for the full financial year (2009-10) and it is inadequate to cover even the Rs 20,872-crore loss the three companies incurred on selling kerosene and cooking gas in April-Dec 2009 period, he said. “The companies will require more compensation to close this financial year in profit,” he added. A large part of the compensation (around Rs 7,100 crore) will go to the largest retailer IOC. Other two OMCs, BPCL and HPCL, will get Rs 2,370 crore and Rs 2,529 crore, respectively. “Oil ministry has accepted this compensation as part-payment for 2009-10. We will ask finance ministry to pay adequate compensation as per July 2009 Cabinet decision,” he said.
Panic in Punjab town after bomb found near LPG plant
Tuesday, 19 January 2010
19 Jan 2010;deccanherald.com:Nabha(Punjab): The timely discovery of the bomb, suspected to be an improvised explosive device (IED), could have averted a major incident here, like the recent Jaipur oil depot fire, senior police officials said. The area was cordoned off by the police and district authorities on Monday evening and a bomb disposal squad from the Punjab Armed Police (PAP) arrived here from Jalandhar, 150 km away, to defuse the bomb. The suspected bomb, which was discovered on Monday evening lying in a canister along the Bhiwanigarh-Nabha highway and very close to the Indian Oil LPG bottling plant, was placed at a gas pipeline of the oil company that comes from Panipat till the bottling plant. Nabha is about 110 km from Chandigarh. "The bomb appears to be an IED. We had requested the army authorities to help and their inspection team confirmed that it is a bomb. The bomb disposal squad has been called to defuse the bomb. We have, meanwhile, secured the bomb," Patiala district police chief R.S. Khatra said. The bomb may have had up to 10 kg of explosives and if it had gone off, it would have led to a major incident at the LPG bottling plant, police officials at the spot told reporters. All staff members of the bottling plant have been asked to remain away from the facility till the bomb is defused. Khatra said that the bomb has been placed in a canister and wrapped in a 'Lohi' (men's shawl) inside a plastic bag.
Govt may hike rate of natural gas produced by ONGC, OIL
Tuesday, 19 January 2010
20 Jan 2010;dailypioneer.com:New Delhi: The Government may for the first time in about five years raise price of natural gas produced by state-owned firms like Oil and Natural Gas Corporation after the Finance Ministry and the Planning Commission backed the proposal for a 30 per cent hike. The Oil Ministry has circulated a Cabinet note for raising price of gas under administered pricing mechanism (APM) from Rs 3,200 per thousand cubic meters ($1.79 per mmBtu) to Rs 4,142 per thousand cubic meters ($2.32 per mmBtu). Price of APM, or the gas produced from fields given to ONGC and OIL on nomination basis, is proposed to be raised in stages to Rs 7,500 per thousand cubic meters or USD 4.2 per million British thermal unit by 2013. “Power and fertiliser ministries are against the hike but Finance Ministry and the Planning Commission are backing the proposal,” a Petroleum Ministry official said. “The plan will be put before the Cabinet for approval in 3-4 weeks time.” The official said the note based on the recommendation of the Tariff Commission, proposes that ONGC be paid Rs 3,875 per thousand cubic meters for the gas it produces while Rs 4,315 would be paid to OIL. Consumer price would be 10 per cent higher than this. Consumer ministries of power and fertiliser feel that the hike would result in increase in feedstock cost but finance ministry and Planning Commission were of the opinion that it would remove distortions in the market.
19 Jan 2010;hindustantimes.com:Anupama Airy:New Delhi: The dutiful exertions of the petroleum sector watchdog have not found favour with its master — the petroleum ministry, which intends to leash it. The ministry has decided to curb the powers of Petroleum and Natural Gas Regulatory Board (PNGRB) and has proposed taking away its right to question the government’s policies and decisions. The regulator has repeatedly questioned the petroleum ministry on its policy of keeping petrol and diesel prices unchanged in the light of rising raw material (crude oil) prices. “The power of the government to supersede the board (regulator) is a provision which exists in case of almost all regulators. These provisions, however, are absent in the PNGRB Act, 2006,” said a cabinet note moved by the petroleum ministry for comments of other ministries, citing the SEBI Act, IRDA Act and the Competition Act, 2002 . “An amendment is required to be provided for the fact that government policy and decisions, as also actions taken by entities in compliance of these, cannot be adjudicated by the Board,” the note said. “In the absence of such an explicit provision in the Act, policies of Government and activities pursuant to such policies can be questioned by the Board under the Act.” The regulator is presently hearing a complaint filed by Reliance Industries Limited, Essar Oil Limited & Shell India Marketing Private Limited against state-owned oil marketing companies — Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — for their selling of petrol and diesel below the cost prices. As the policy on petroleum products’ pricing has caused loss of marketing revenue to the state-owned marketing entities, PNGRB had questioned this policy of the government. Asked to comment, L Mansingh, Chairman of PNGRB told Hindustan Times, “I have also received the note. I am not in a position to say anything immediately but we are studying the matter and will file our replies shortly.” Another senior official in PNGRB said, “The regulator’s move to question the government is well within the purview of the PNGRB Act, 2006 and Chapter V of the Act empowers the regulator to adjudicate (on) disputes and complaints between entities.”
19 Jan 2010;business-standard.com:Swaraj Baggonkar:Mumbai: India Yamaha Motors, a subsidiary of the Japanese biking giant, is working on a relaunch of its once-popular model, the RX 100. The company is examing various options, such as engine type and styling. However, sources say it would largely maintain the basic design of the earlier vehicle, which drove demand for the company. Known for its acceleration and agility, the RX 100 was the choice of many young Indians in the mid and late 1980's, after Yamaha (in partnership with Escorts Ltd) launched it in 1985. Pankaj Dubey, national business head, India Yamaha Motor, said: “We are working on the lines of the RX 100 and are looking to have something of a similar product for India. It will be early to talk about it but we will come out with a product there.” One reason the RX 100 was phased out by Yamaha was the adoption of stricter emission control norms in the country. The RX 100 was a high polluter. Its two-stroke engine had a problem meeting the required norms, first brought about in the mid-1990s. Eventually, most two-stroke bike manufacturers either upgraded their models with four-stroke engines or simply terminated production and replaced these with different models. Yamaha opted to shut production of the RX 100 in 1996, as more frugal, fuel-efficient and low on maintenance four-stroke bikes made their way into the market. However, the two-stroke range were considered special by many owners worldwide because of the higher power option they offered, compared to the four-stroke powered engines. In addition, they allowed riders to ride the bike at very low rpm in higher gears (10 km/hr in fourth gear, for instance). Yamaha will not relaunch the RX 100 with a two-stroke bike, as India would upgrade to even stricter Bharat Stage IV emission norms in the coming months. “We cannot launch the RX (100) with a two-stroke engine but we are working on a four-stroke version for the bike,” added Dubey. The launch could catapult Yamaha’s volumes multi-fold if the bike is priced in the same category as other entry or commuter level bikes, says experts. “It is difficult to find the bike in the resale market, as current owners do not want to part with it. Many bike enthusiasts have asked Yamaha to reintroduce the RX 100, known for its legendary style and performance. If the company manages to do what Enfield did to the Classic model, then it will be a success,” said a motoring expert. From a share of about 3 per cent currently, Yamaha is targeting 10 per cent market share, or sales of 850,000 units by 2012, when the Indian motorcycle market is expected to swell to 8.5 million from the current 5.8 million (as of the year ended March 2009).
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