Petrol price hike this week; diesel, cooking gas put off
Tuesday, 10 May 2011
11 May 2011;timesofindia.indiatimes.com:NEW DELHI: The government on Tuesday deferred for a week a ministerial panel's meeting to consider raising diesel and cooking gas prices. But it is expected to allow state-run oil marketers to raise petrol price at least Rs 3 a litre over the weekend. Oil minister S Jaipal Reddy said the meeting was postponed to "accommodate" preoccupation of some ministers on the panel. "It (the next meeting) could be anytime on (May) 17 or 18." The ministerial panel was to meet on Wednesday to consider raising prices of diesel by Rs 2-2.50 a litre and cooking gas by Rs 25-50 per refill. The government controls price of diesel, cooking gas and kerosene. State-run oil marketers are free to revise petrol price but never do it without a cue from the oil ministry's. The oil ministry is now expected to give green signal for a petrol price revision once the last phase of polling gets over in West Bengal on Wednesday. The oil companies may then raise petrol price over the weekend. On Saturday, TOI had reported that the government was likely to wait and watch a little to see how last week's slide in global crude prices played out. Crude slid below $100-level on the news of Osama bin Laden's killing on May 2. The development lifted expectations of stability in West Asia and pushed up the dollar against all major currencies. Prices have since then rebounded above the triple-digit mark and are nearing almost pre-slide levels. Oil company executives said the street prices of motor fuels roughly correspond to $90-95/barrel of crude. The mix of crude bought by them has averaged $118-120. Last heard, the firms are losing about Rs 8.50 a litre on petrol, Rs 16.76 on diesel, Rs 29.69 on kerosene and Rs 329.73 on a cooking gas refill. They have projected a loss of Rs 180,000 crore this fiscal, calculated at $110 per barrel of crude. In the 2010-11, the firms lost Rs 78,202 crore but so far the government has provided only Rs 20,911 crore in compensation. The oil marketing firms lost Rs 2,227 crore on selling petrol below the imported cost during the April-June period before its price was freed from government control. They lost Rs 34,384 crore on the sale of diesel, Rs 19,566 crore on kerosene and Rs 22,025 crore on the sale of cooking gas. In 2008-09, the government had issues oil bonds worth Rs 71,292 crore to the three firms to make up for more than two-thirds of the Rs 103,292 crore revenue loss. Upstream oil firms like ONGC provided another Rs 32,000 crore.
10 May 2011;dailypioneer.com:New Delhi: Car companies hit the bumpy road of rising interest rates and fuel prices, as a result, sales witnessed the slowest growth rate in 22 months in April this year at 13.18 per cent. As per SIAM figures, domestic passenger car sales stood at 1,62,825 units in April compared to 1,43,862 units in the same month last year. “The April, 2011, sales growth rate was the slowest since June, 2009, when the growth rate was 8.23 per cent. Consumer confidence is low as economic parameters are wobbly at the moment,” said SIAM Senior Director Sugato Sen. He said interest rate hikes, coupled with the increase in prices of vehicle due to rising commodity prices, have also contributed to postponing of purchases. Total sales of vehicles across categories registered a growth of 22.80 per cent to 13,38,564 units in April as against 10,90,041 units in the same month last year, SIAM said. In the passenger car segment, market leader Maruti Suzuki’s sales grew by 7.63 per cent to 73,905 units. Rival Hyundai Motor India’s sales increased by 10.89 per cent to 31,604 units. However, homegrown auto major Tata Motors’ passenger car sales were down by 1.10 per cent at 19,544 units. Total two-wheeler sales last month increased by 26.44 per cent to 10,43,970 units from 8,25,632 units in April, 2010. According to the SIAM data, motorcycle sales in the country grew by 23.39 per cent during the month to 8,09,565 units from 6,56,096 units in the same month last year. In this segment, market leader Hero Honda posted a 38.58 per cent jump in sales to 4,69,398 units. Rival Bajaj Auto’s sales went up by 4.24 per cent to 1,95,971 units. Honda Motorcycle & Scooter India (HMSI) posted a 1.35 per cent decline in sales to 57,237 units, while TVS Motor moved 49,804 units, 1.62 per cent more than the corresponding month of the previous year. The scooter segment’s overall sales grew by 48.06 per cent to 1,75,054 units from 1,18,232 units. HMSI’s scooter sales grew by 79.52 per cent to 74,432 units, while Hero Honda sold 35,079 units, up 48.13 per cent. TVS Motor’s sales saw 29.04 per cent growth during the month to 32,464 units. Commercial vehicles sales grew by 8.22 per cent to 53,202 units from 49,162 units in the year-ago period, SIAM said. Sen said this was the slowest growth rate since September, 2009, when the growth rate was 7.49 per cent. Medium and Heavy Commercial Vehicle (M&HCV) sales increased marginally to 22,391 units during the month, compared to 22,236 units in April last year.According to SIAM, light commercial vehicle (LCV) sales grew 14.43 per cent to 30,811 units in April, 2011, from 26,926 units in April, 2010. Sen said the sales growth rate of commercial vehicles, an indicator of economic growth, is showing that “some concerns are coming”. “In the passenger carriers segment, the industry has a major problem with companies having issues with various states over purchases of buses under the JNNURM,” he said. Some States have not honoured order commitments while some have not paid companies after taking deliveries, he added. Passenger carrier sales in the M&HCV category slid by 20.08 per cent to 2,667 units in April, while in the LCV segment, sales declined by 25.89 per cent in April this year to 3,321 units, SIAM said. In the three-wheeler category, sales grew by 1.94 per cent to 33,788 units from 33,144 units in the same month last year.
SBI loans to be costlier as it hikes lending rates by 75 bps
Tuesday, 10 May 2011
10 May 2011;timesofindia.indiatimes.com:MUMBAI: Country's largest lender SBI on Tuesday announced a hike in lending rates by 75 basis points (bps), making housing, auto and other loans dearer for both new and existing borrowers. State-owned SBI has increased the base rate, or the minimum lending rate, by 75 bps (0.75 per cent) to 9.25 per cent. The new rate is effective from May 12, the lender said in a statement. The hike in State Bank of India's (SBI) lending rates comes a week after the Reserve Bank raised its lending and borrowing rates by 50 basis points. SBI has also increased its benchmark prime lending rate (BPLR) by 75 basis points which would mean that existing borrowers will also have to pay more for their loans. With this, BPLR goes up to 14 per cent. SBI has also raised deposit rates by up to 225 basis points on select four maturities. Many banks have been on a rate hike spree since the Reserve Bank's decision to raise short-term key rates in its annual credit policy on May 3. Over a dozen banks, including Punjab National Bank, ICICI Bank, Oriental Bank of Commerce and Corporation Bank, have raised interest rates in past one week.
Petrol prices may go up this week; Diesel, LPG rates may follow
Tuesday, 10 May 2011
10 May 2011;economictimes.indiatimes.com:NEW DELHI: The government may hike diesel and domestic LPG rates next week while an increase in petrol prices may happen later this week. "The Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee (on fuel price hike) was to meet tomorrow evening. It has been put off," Oil Minister S Jaipal Reddy told reporters here. EGoM was to meet tomorrow to consider raising the diesel price by Rs 3-4 a litre and domestic LPG rates by Rs 20-25 per cylinder. "It has been postponed to accommodate some ministers... It could be anytime on (May) 17 or 18," he said. State-owned oil firms, however, are likely to get the go-ahead to raise the price of petrol, which they have not revised since January on informal 'advice' from the government in view of Assembly elections in five states. "Petrol prices may be raised as early as Thursday-Friday night," an official said, adding a steep hike of up to Rs 3 per litre of petrol is on the cards. The government had freed petrol prices from its control last June, but state oil firms continue to be guided by informal advice from the government. The hike needed to take petrol prices to international parity is about Rs 8.50 per litre, but the entire burden will not be passed on to consumers in one go. "Oil companies will be asked to stagger the hike over a couple of months," the official said. Reddy said the day EGoM meets on fuel prices, a separate Group of Ministers (GoM) that is vetting London-listed Vedanta Resources' USD 9.6 billion acquisition of Cairn India , may also meet. "I think when the next date is fixed on that day itself we will deal with both questions - the question of under-recoveries of oil companies and the question of government approval to Cairn-Vedanta deal," he said. State-owned Indian Oil, Bharat Petroleum and Hindustan Petroleum currently lose Rs 16.17 a litre on diesel and after adding local sales tax or VAT, the desired increase to make rates at par with international prices is Rs 18.19 a litre. Besides petrol and diesel, the three state oil firms lose Rs 29.69 a litre on kerosene and Rs 329.73 per 14.2-kg domestic LPG cylinder. Officially on the EGoM's agenda was ways of mitigating the over Rs 180,000 crore revenue loss state-owned oil firms have projected in 2011-12 on selling diesel, domestic LPG and kerosene at current rates. The three firms will "at current international crude oil prices lose Rs 180,208 crore in revenues on selling diesel, domestic LPG and kerosene below their imported cost in the 2011-12 fiscal," the official said.
Luxury cars to become costlier as major carmakers will soon raise prices of cars assembled in India
Monday, 09 May 2011
09 May 2011;economictimes.indiatimes.com:Chanchal Pal Chauhan:NEW DELHI: Car lovers in India, looking for a touch of luxury, will soon have to shell out more to drive home their cherished premium four-wheelers. Foreign luxury cars will turn more expensive in India as global auto majors plan to raise prices following an increase in tax on locally assembled cars. Mercedes, BMW, Audi, Land Rover and Renault will soon raise prices of cars assembled in India by up to Rs 10 lakh to pass on the cost increase due to higher tax to customers. The Indian government recently raised customs duty on foreign luxury cars that are assembled in local facilities to 30% from 10%. "We are looking at increasing prices for one of our major models in the next few weeks. We would be paying high tax on one of our cars with a high proportion of pre-assembled components. The new policy regulation has forced us to bring in new prices soon," said Peter Honegg, chief executive officer and managing director, Mercedes Benz India . The company plans to raise prices of its top-end S class sedan by up to Rs Rs 8 lakh. The S class sedan falls in the price range of Rs 84.3 lakh to more than 1 crore. The new lot of S class sedans produced in April will reach the showrooms in 4-6 weeks and will carry a revised price tag, he said. The company is assessing the quantum of price increase keeping in mind the higher duty. Audi, BMW, and Land Rover, will also increase prices of its luxury cars assembled in India, company executives said. These cars are in the price range of Rs 30-90 lakh. The increase in tax will hit premium car sales in India, industry experts said. Luxury car sales doubled to 15,000 in fiscal 2010-11 from a year earlier driven by rising incomes and easy financing. The nominal customs duty on luxury cars enabled competitive pricing. "We are studying the government policy and will take appropriate decisions to amend our production strategy suitably," said Michael Pershke, chief executive officer, Audi India . The German luxury carmaker's A4 and A6 sedans and sports utility vehicle Q5 may incur 30% tax. French carmaker Renault is likely to increase prices of its sedan Fluence by up to Rs 2 lakh, a company executive said. Fluence will be launched in India later this month from its Chennai facility. "We are also in line with the auto industry in the higher tax bracket of 30% that will be reflected in our price line," said a company spokesperson. Land Rover's sports utility vehicle Freelander 2, recently launched in India and expected to compete with BMW X1 on pricing, will also come under the revised tax structure. The Freelander, assembled at parent company Tata Motors's facility in Pune, will cost Rs 3-5 lakh more than the originally envisaged price tag.
09 May 2011;business-standard.com:New Delhi: Reliance Industries (RIL) has debunked charges that KG-D6 gas field output fell due to non-drilling of an adequate number of wells, saying the phenomenon was a result of reservoir complexity and indiscriminate drilling would have lead to infructous capital expenditure. The drop in production from over 61 million cubic metres per day (mcmd) achieved in March 2010, to under 50 mcmd was a result of the main reservoir channels not behaving in the manner predicted in 2006, it said. “Reliance has told us that pressure in wells has fallen rapidly and some wells haven shown early water ingress,” an oil ministry official said. “They made a detailed presentation on the problems being faced at the field on May 2 and by the look of it, we feel there are some genuine reservoir issues.” More wells on the main channel area of the Dhirubhai-1 and 3 fields, the largest of the 18 gas finds in the block that were put into production in 2009, is unlikely to either raise production rate or recovery, as they will drain the same resource, he said. Reliance will identify disconnected gas volumes and drill wells on them, an exercise that will take three-four years. It has drilled 20 out of the 22 wells committed in the field development plan (FDP), as it now feels drilling of additional wells unmindful of the reservoir behaviour would have resulted in huge capital expenditure, which would have been difficult to justify later. The Directorate General of Hydrocarbons is pushing for drilling of 11 committed wells by April 1, 2012, to raise output. Reliance wants UK’s BP Plc, the world’s best deep water production and reservoir management firm, to come on board first. BP is buying 30 per cent interest in KG-D6 and 22 other blocks for $7.2 billion. Once the government approves the stake buy, Reliance plans to sit with BP to come up with most optimal solution to the reservoir problem, including drilling of additional wells. Reliance is allowed to recover every penny spent on the field from sale of gas before profits are split with the government. Investment in injudicious additional wells would have led to reduction in government’s petroleum profit. Sitting in water depths of up to 1.2 kilometres, the KG-D6 is the first deepsea field in South Asia to go on production and there are no deepwater analogs available for reference on how the reservoir will behave. As a result, Reliance had to depend on its own resources and some global industry consultants for the characterisation, modelling and development of this complex deep water reservoir system. Current wells have no contribution from the areas outside the main channel area, contrary to what was predicted at the time of FDP in 2006.
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