Officials from Iran and India will meet on Friday for talks on a dispute over how India makes payments for $12 billion worth of crude oil imports a year.
The dispute escalated on Wednesday when Tehran refused to sell oil to the world's fourth-biggest crude importer after New Delhi imposed prohibitive new rules. Last week, the Reserve Bank of India said deals with Iran must be settled outside a long-standing Asian Clearing Union system.
Iran is under global pressure over its nuclear programme, and though United Nations sanctions do not forbid the purchase of Iranian oil, the United States has pressed hard for governments and companies to stop dealing with Tehran.
UN sanctions on the financial sector make financing trade and clearing payments difficult. Supply of around 400,000 barrels per day (bpd) of Iranian crude to state-owned refiners and privately owned Essar Oil in India is at risk. This is the equivalent of about 13 percent of the crude processed in India last month.
Is Iran likely to stop supplying India?
Analysts and oil traders expect the two countries to resolve the issue, given the large volume and value of the crude at stake and the difficulties Indian refiners would face in finding alternative supplies.
"They (the United States) have themselves not been willing to sanction crude sales from Iran (to the international market) for the obvious balance of supply and demand," said Samuel Ciszuk at IHS Energy consultancy.
"However, informally they (the United States) have been using financial sanctions as the main tool of pressure to cause uncertainty and insecurity for Iran. They want to make sure no one finds it easy to deal with Iran," he added.
Oil traders in Asia also said they expected sales to resume because a full suspension would be too costly for India. Indian refiners may have to explore alternative payment methods such as open credit or barter trade, one trader said. These are already used by some of Iran's oil trade partners.
Ambika Sharma , deputy secretary general at the Federation of Indian Chambers of Commerce and Industry, said: "The two central banks could look at settling the trade transaction in a currency other than the euro and the U.S. dollar"
India has been one of the top three buyers of Iranian crudes along with China and Japan , and Iran is the second-biggest supplier of crude to India after Saudi Arabia.
What happens if Iran stops supplying India?
Spot prices for alternative crude on physical markets would probably rise as Indian refiners search for suppliers to plug the gap left by the shortfall from Iran. But prices for Iranian crude would probably fall as it looks for new buyers or seeks to boost volumes to existing buyers.
International crude futures could rise on concern that the disruption would become more widespread and that other countries could also struggle to find ways to make payments. Iran's other main Asian buyers said on Thursday, however, they saw no disruption in supply.
Thursday, December 30, 2010
Sanctions on IRAN
State-run refineries could run low on their stock of crude next month as the RBI move to curb payment facilities with Iran has put a question mark over supply of some 10 million barrels of oil from the Persian Gulf nation contracted for January.
Realizing the gravity of the situation, top RBI officials will meet their Iranian counterparts shortly in Mumbai to finalize a panel of banks through which payments can be made. Till 2008, payments under the ACU (Asian Clearing Union) mechanism was done in Greenbacks, but after the US imposed sanctions against Iran, the currency shifted to the euro.
Oil ministry officials said the RBI move had taken them by surprise and a replacement for the January contract may not be easy to find or will come at a huge cost, which will negatively impact the oil firms. Iran accounts for some 12% of India's oil needs and a sudden snapping of a system in vogue from 1976 could spell doom if an alternative is not found quickly, one official said.
UN sanctions do not forbid buying Iranian oil and recently the European Central Bank (ECB) asked the RBI and other central banks of ACU to provide certificates that the euro being used to import products are not on US sanctions list. Sources said while certification for crude oil imports was easy to provide and track, the RBI chose to scrap the entire system itself.
In the absence of ACU, Iran and its crude supplier National Iranian Oil Co (NIOC) are jittery over sales without being backed by the sovereign guarantee of the central bank. Also, oil firms will have to find an alternative European bank, which can accept payments on behalf of NIOC.
India imported 21.3 million tonnes of crude oil from Iran in 2009-10 and this year imports are expected to be around 18 million tonnes as Reliance Industries has totally stopped using crude from that country. MRPL is the biggest importer of Iranian crude oil with 7.1 million tonnes of contracted quantity. Mumbaibased Essar Oil imports roughly 3 million barrels per month (5-5 .5 million tonnes a year), IndianOil 3.5 million tonnes and Hindustan Petroleum Corp about 3 million tonnes.
Realizing the gravity of the situation, top RBI officials will meet their Iranian counterparts shortly in Mumbai to finalize a panel of banks through which payments can be made. Till 2008, payments under the ACU (Asian Clearing Union) mechanism was done in Greenbacks, but after the US imposed sanctions against Iran, the currency shifted to the euro.
Oil ministry officials said the RBI move had taken them by surprise and a replacement for the January contract may not be easy to find or will come at a huge cost, which will negatively impact the oil firms. Iran accounts for some 12% of India's oil needs and a sudden snapping of a system in vogue from 1976 could spell doom if an alternative is not found quickly, one official said.
UN sanctions do not forbid buying Iranian oil and recently the European Central Bank (ECB) asked the RBI and other central banks of ACU to provide certificates that the euro being used to import products are not on US sanctions list. Sources said while certification for crude oil imports was easy to provide and track, the RBI chose to scrap the entire system itself.
In the absence of ACU, Iran and its crude supplier National Iranian Oil Co (NIOC) are jittery over sales without being backed by the sovereign guarantee of the central bank. Also, oil firms will have to find an alternative European bank, which can accept payments on behalf of NIOC.
India imported 21.3 million tonnes of crude oil from Iran in 2009-10 and this year imports are expected to be around 18 million tonnes as Reliance Industries has totally stopped using crude from that country. MRPL is the biggest importer of Iranian crude oil with 7.1 million tonnes of contracted quantity. Mumbaibased Essar Oil imports roughly 3 million barrels per month (5-5 .5 million tonnes a year), IndianOil 3.5 million tonnes and Hindustan Petroleum Corp about 3 million tonnes.
Tuesday, December 28, 2010
Should diesel prices be increased": Chairman in an exclusive debate in Business Standard
The increase in prices will impact prices of food and other essential commodities, but it is important if the oil marketing companies are to progress so that the country can meet its ever-growing energy needs.
Mr. B M Bansal,
Chairman, Indian Oil Corporation Ltd.
The deregulation of diesel has the potential to unlock the value of the oil firms. Today subsidies affect both oil marketing companies and upstream companies.
It is normally assumed that regulation is beneficial and the only prudent approach in a nation as complex as it is poor is to have a policy that benefits the underprivileged. But some regulations are often rendered obsolete owing to dynamic shifts in the business. And soon, the realities of the market start impinging on even the best of good intentions! Diesel has long been seen as a sensitive fuel along with kerosene and LPG. It was thought that kerosene and LPG impacted the aam aadmi and the price of diesel was linked to inflation. It is correct that diesel prices have an implication for the economy with the “trickle down” effect on the freight and goods sector.
The flip side is that over a period of time with the cost of diesel kept artificially low in comparison to alternatives, passenger transport tends to get “dieselised”. You only have to look at the number of diesel passenger cars and sports utility vehicles (SUVs) being sold, especially in the luxury segment. The question is: are we subsidising an SUV culture? Should the relatively low-income earning two-wheeler owner pay for free-market petrol while owners of high-end luxury cars and SUVs get a subsidy from the government?
We need a mass rapid transit infrastructure policy under which the transportation of people and goods should not depend on roads alone. The potential of the railways should be fully tapped. The diesel subsidies can actually be invested in big-ticket mass transportation systems that will wean people off the addiction to diesel-based transport.
The central government has already rationalised customs and excise duties to alleviate the impact of volatile international prices on retail selling prices. But the state governments have chosen to keep the sales tax at fairly high rates in view of the revenue-earning potential of diesel. This apart, private oil companies have closed their retail outlets despite making quite a lot of investment in them, a move that has meant a shift in sales to public sector oil marketing companies’ outlets, which has resulted in an additional burden. Investments made by the private sector in the hydrocarbon value chain, especially the retail network, have been rendered useless.
Deregulating diesel has the potential to unlock the value of the oil companies. Today subsidies affect both oil marketing companies and upstream companies. Valuable resources being spent by the government could actually go into ensuring oil security. Today, we have excellent examples of companies that have been rewarded by investors who are even willing to pay a premium. Ultimately, the beneficiary is the nation because these companies are owned by the people of India. The price of crude is a much speculated issue and it is commonly accepted that the days of cheap crude oil are long gone. And countries that are dependent on foreign sources for the energy needs are scouting for and investing in oil equity assets. These efforts are being led by national oil companies backed by Sovereign Wealth Funds. The best example is China, which is building a “Great Wall” of energy assets that will fuel its needs into the distant future.
The way forward for India is for our national oil companies to get into the act to build a truly international portfolio of oil and gas assets. The government has been supporting the efforts of the national oil companies by empowering them through the Maharatna status. But, investing for the future should obviously come from the present. And by paying the right price for energy products and services we generate the revenues for investing for the next generation.
Beyond urban India, which has benefited from the rapid growth of the last decade, is the real India, where there are millions of our people struggling to make ends meet. When the oil marketing companies moved to the rural market, opening up retail outlets and appointing LPG distributors, we so a tremendous difference to livelihoods. All this will take long-term, sustained investments for the real “aam aadmi”. And the sooner we define the “real aam aadmi” the better, for we need to tackle the real and imperative task of delivering energy assurance to over a billion Indians into the next decades as well.
Mr. D Raja, CPI Member of Parliament
The government has not made any sincere attempt at accelerating the exploration of oil and natural gas in the country to augment domestic supply to control the price rise.
The Union government has become insensitive towards rising prices and rampant corruption in the country and the people will teach it a lesson when the next general elections come around.
The country is facing huge losses on account of the price at which 2G spectrum was sold to private operators and from questionable contracts for the Commonwealth Games. But the government seems to be more concerned about increasing the prices of petrol and other commodities. After the government decided to raise the price of petrol by Rs 3 a litre, the price of diesel is certain to be increased any moment.
There have been several such increases since the United Progressive Alliance government came to power. The recent price rise would also have a cascading effect on the common people because increasing the prices of petrol and diesel would impact the prices of food and other essential commodities. In the past six months, the price of petrol has gone up by Rs 8.41.
Interestingly, a substantial part of the duties imposed by the government on petrol and diesel goes to the government. I would like to know why the Union and state governments can’t cut their share of taxes on these products. The Left parties have been raising these issues, both inside and outside Parliament, and we will continue to ask the government this question.
If prices continue to rise in the same manner, how will the common people in this country pay for essentials? Latest reports show that 77 per cent of the people earn barely Rs 20 or less per day. How will they buy food items if prices continue to rise? Poverty is a big problem in India and half the population is not even earning half-a-dollar a day. To make things worse for them, the government is not even considering raising minimum wages. I want to know how people will buy vegetables and other essential food items with the same income. The government must explain this.
On the issue of oil price decontrol, ever since the Union government gave oil companies the autonomy to selectively determine product prices, the prices of petrol and diesel have only increased. I don’t remember a day when the oil companies actually reduced the prices of petrol and diesel. It seems the autonomy was given only to the oil companies to raise prices and burden the people. The government is not clear about what it is doing by increasing these prices.
Oil producers might argue that the price rise is a function of demand and supply. But it is also true that the government has not made any sincere attempt at accelerating the exploration of oil and natural gas in the country to augment domestic supply. It has not made serious efforts to carry out exploration work near Bombay High and Krishna Basin to find new reserves of oil and natural gas within the country to control the oil price rise.
The Supreme Court has also said natural gas is a national asset. I want to know how the government is using these national assets for the welfare of the common people. The government has to come out with short-term and long-term perspectives for energy security.
Earlier, the government was talking about Iran-Pakistan-India (IPI) pipeline and now, it has suddenly started discussing a Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. If the IPI pipeline is not feasible how can the government even consider TAPI viable? The government doesn’t consider discussing these issues either inside or outside Parliament.
The government has so far maintained that rich people can afford to pay higher prices for petrol. I want to know what steps the government is taking to improve the public transport system in different cities. Will the government increase taxes on luxury cars? The entire process of increasing petrol and diesel prices smacks of profiteering.
It has become the mindset of this government to generate revenue by increasing prices of petrol and diesel. The government should generate revenue for exploration and to augment resources but it should not be done at the cost of the common people.
Mr. B M Bansal,
Chairman, Indian Oil Corporation Ltd.
The deregulation of diesel has the potential to unlock the value of the oil firms. Today subsidies affect both oil marketing companies and upstream companies.
It is normally assumed that regulation is beneficial and the only prudent approach in a nation as complex as it is poor is to have a policy that benefits the underprivileged. But some regulations are often rendered obsolete owing to dynamic shifts in the business. And soon, the realities of the market start impinging on even the best of good intentions! Diesel has long been seen as a sensitive fuel along with kerosene and LPG. It was thought that kerosene and LPG impacted the aam aadmi and the price of diesel was linked to inflation. It is correct that diesel prices have an implication for the economy with the “trickle down” effect on the freight and goods sector.
The flip side is that over a period of time with the cost of diesel kept artificially low in comparison to alternatives, passenger transport tends to get “dieselised”. You only have to look at the number of diesel passenger cars and sports utility vehicles (SUVs) being sold, especially in the luxury segment. The question is: are we subsidising an SUV culture? Should the relatively low-income earning two-wheeler owner pay for free-market petrol while owners of high-end luxury cars and SUVs get a subsidy from the government?
We need a mass rapid transit infrastructure policy under which the transportation of people and goods should not depend on roads alone. The potential of the railways should be fully tapped. The diesel subsidies can actually be invested in big-ticket mass transportation systems that will wean people off the addiction to diesel-based transport.
The central government has already rationalised customs and excise duties to alleviate the impact of volatile international prices on retail selling prices. But the state governments have chosen to keep the sales tax at fairly high rates in view of the revenue-earning potential of diesel. This apart, private oil companies have closed their retail outlets despite making quite a lot of investment in them, a move that has meant a shift in sales to public sector oil marketing companies’ outlets, which has resulted in an additional burden. Investments made by the private sector in the hydrocarbon value chain, especially the retail network, have been rendered useless.
Deregulating diesel has the potential to unlock the value of the oil companies. Today subsidies affect both oil marketing companies and upstream companies. Valuable resources being spent by the government could actually go into ensuring oil security. Today, we have excellent examples of companies that have been rewarded by investors who are even willing to pay a premium. Ultimately, the beneficiary is the nation because these companies are owned by the people of India. The price of crude is a much speculated issue and it is commonly accepted that the days of cheap crude oil are long gone. And countries that are dependent on foreign sources for the energy needs are scouting for and investing in oil equity assets. These efforts are being led by national oil companies backed by Sovereign Wealth Funds. The best example is China, which is building a “Great Wall” of energy assets that will fuel its needs into the distant future.
The way forward for India is for our national oil companies to get into the act to build a truly international portfolio of oil and gas assets. The government has been supporting the efforts of the national oil companies by empowering them through the Maharatna status. But, investing for the future should obviously come from the present. And by paying the right price for energy products and services we generate the revenues for investing for the next generation.
Beyond urban India, which has benefited from the rapid growth of the last decade, is the real India, where there are millions of our people struggling to make ends meet. When the oil marketing companies moved to the rural market, opening up retail outlets and appointing LPG distributors, we so a tremendous difference to livelihoods. All this will take long-term, sustained investments for the real “aam aadmi”. And the sooner we define the “real aam aadmi” the better, for we need to tackle the real and imperative task of delivering energy assurance to over a billion Indians into the next decades as well.
Mr. D Raja, CPI Member of Parliament
The government has not made any sincere attempt at accelerating the exploration of oil and natural gas in the country to augment domestic supply to control the price rise.
The Union government has become insensitive towards rising prices and rampant corruption in the country and the people will teach it a lesson when the next general elections come around.
The country is facing huge losses on account of the price at which 2G spectrum was sold to private operators and from questionable contracts for the Commonwealth Games. But the government seems to be more concerned about increasing the prices of petrol and other commodities. After the government decided to raise the price of petrol by Rs 3 a litre, the price of diesel is certain to be increased any moment.
There have been several such increases since the United Progressive Alliance government came to power. The recent price rise would also have a cascading effect on the common people because increasing the prices of petrol and diesel would impact the prices of food and other essential commodities. In the past six months, the price of petrol has gone up by Rs 8.41.
Interestingly, a substantial part of the duties imposed by the government on petrol and diesel goes to the government. I would like to know why the Union and state governments can’t cut their share of taxes on these products. The Left parties have been raising these issues, both inside and outside Parliament, and we will continue to ask the government this question.
If prices continue to rise in the same manner, how will the common people in this country pay for essentials? Latest reports show that 77 per cent of the people earn barely Rs 20 or less per day. How will they buy food items if prices continue to rise? Poverty is a big problem in India and half the population is not even earning half-a-dollar a day. To make things worse for them, the government is not even considering raising minimum wages. I want to know how people will buy vegetables and other essential food items with the same income. The government must explain this.
On the issue of oil price decontrol, ever since the Union government gave oil companies the autonomy to selectively determine product prices, the prices of petrol and diesel have only increased. I don’t remember a day when the oil companies actually reduced the prices of petrol and diesel. It seems the autonomy was given only to the oil companies to raise prices and burden the people. The government is not clear about what it is doing by increasing these prices.
Oil producers might argue that the price rise is a function of demand and supply. But it is also true that the government has not made any sincere attempt at accelerating the exploration of oil and natural gas in the country to augment domestic supply. It has not made serious efforts to carry out exploration work near Bombay High and Krishna Basin to find new reserves of oil and natural gas within the country to control the oil price rise.
The Supreme Court has also said natural gas is a national asset. I want to know how the government is using these national assets for the welfare of the common people. The government has to come out with short-term and long-term perspectives for energy security.
Earlier, the government was talking about Iran-Pakistan-India (IPI) pipeline and now, it has suddenly started discussing a Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. If the IPI pipeline is not feasible how can the government even consider TAPI viable? The government doesn’t consider discussing these issues either inside or outside Parliament.
The government has so far maintained that rich people can afford to pay higher prices for petrol. I want to know what steps the government is taking to improve the public transport system in different cities. Will the government increase taxes on luxury cars? The entire process of increasing petrol and diesel prices smacks of profiteering.
It has become the mindset of this government to generate revenue by increasing prices of petrol and diesel. The government should generate revenue for exploration and to augment resources but it should not be done at the cost of the common people.
Tuesday, November 30, 2010
SUV owners should pay full market price of diesel: Ramesh Read more: SUV owners should pay full market price of diesel: Ramesh
NEW DELHI: Training his guns again on sports utility vehicles (SUVs), environment minister Jairam Ramesh today asked the users of these fuel-guzzling cars to pay full market price for diesel which is subsidised for the benefit of farmers.
Ramesh, however, made it clear that his "deliberate" criticism of the SUVs need not be seen as him being against the automobile sector.
He had recently called SUVs as "criminals" and "Socially Useless Vehicles" for being bad emitters, fuelling a controversy in the auto sector. Germany, which is home to auto major BMW, had also taken strong exception to the remarks.
"Why should they get subsidised fuel meant for farmers," Ramesh asked while speaking at a conference on 5th Sustainability Summit organised by CII.
"We introduce the (diesel) subsidy for a certain economic purposes but have ended up with a wholly different purpose...," he said while favouring incentives to the firms aiming at sustainable development.
Ramesh made it clear that he is not trying to hurt the growth of the auto industry in the country.
"I am not knocking the growth of the automotive industry but those who want to use diesel cars must pay the full market price for the fuel. Why should they get subsidised fuel meant for farmers?" he said.
Ramesh said there was a need for creating an incentive structure from a fiscal point of view particularly which rewards and added that stimulating sustainable development at the producer-end is absolutely important.
The Minister also called for an incentive structure which has to be skewed in favour of sustainable development choice as far as consumers are ready to embrace such mechanism.
"We need to move to a system which looks at rewarding or incentivise those companies that actually promote the objective of sustainable development, that promote energy conservation, water conservation and protection and preservation of natural resources," Ramesh said.
source:http://timesofindia.indiatimes.com/business/india-business/SUV-owners-should-pay-full-market-price-of-diesel-Ramesh/articleshow/7015405.cms
Ramesh, however, made it clear that his "deliberate" criticism of the SUVs need not be seen as him being against the automobile sector.
He had recently called SUVs as "criminals" and "Socially Useless Vehicles" for being bad emitters, fuelling a controversy in the auto sector. Germany, which is home to auto major BMW, had also taken strong exception to the remarks.
"Why should they get subsidised fuel meant for farmers," Ramesh asked while speaking at a conference on 5th Sustainability Summit organised by CII.
"We introduce the (diesel) subsidy for a certain economic purposes but have ended up with a wholly different purpose...," he said while favouring incentives to the firms aiming at sustainable development.
Ramesh made it clear that he is not trying to hurt the growth of the auto industry in the country.
"I am not knocking the growth of the automotive industry but those who want to use diesel cars must pay the full market price for the fuel. Why should they get subsidised fuel meant for farmers?" he said.
Ramesh said there was a need for creating an incentive structure from a fiscal point of view particularly which rewards and added that stimulating sustainable development at the producer-end is absolutely important.
The Minister also called for an incentive structure which has to be skewed in favour of sustainable development choice as far as consumers are ready to embrace such mechanism.
"We need to move to a system which looks at rewarding or incentivise those companies that actually promote the objective of sustainable development, that promote energy conservation, water conservation and protection and preservation of natural resources," Ramesh said.
source:http://timesofindia.indiatimes.com/business/india-business/SUV-owners-should-pay-full-market-price-of-diesel-Ramesh/articleshow/7015405.cms
Tuesday, November 16, 2010
Govt not considering diesel price decontrol : Deora
Govt not considering diesel price
decontrol : Deora
16 Nov, 2010, 1516 hrs IST , PTI
NEW DELHI: The Government is not
considering freeing diesel pricing from its
control yet, Oil Minister Murli Deora said in
Parliament today .
" Currently , there is no proposal under
consideration to fully decontrol the price of
diesel , " Deora said in a written reply to a
question in the Rajya Sabha here .
State - owned Indian Oil Corp , Hindustan
Petroleum Corp and Bharat Petroleum Corp
sell diesel at a rate which is Rs 2 .62 per litre
below its imported cost , he said.
The Government had, on June 26, decided to
give public sector oil firms freedom to price
petrol and diesel in line with cost . However ,
while petrol pricing was freed with immediate
effect , for diesel it was stated that complete
decontrol will be done in stages .
Deora said the move resulted in price of petrol
going up by Rs 3 .50 a litre in Delhi .
Besides , the government decided to raise the
diesel price by an ad - hoc Rs 2 per litre even
though the difference between the domestic
retail price and imported cost of the fuel was
almost twice that.
Since then , diesel rates have not been
changed, Deora said , without saying as to
when diesel pricing will be freed completely .
Meanwhile, petrol price has risen by Rs 1 .48
per litre on top of the June 26 increase, he
said .
Deora said that for the current fiscal , the
public sector oil marketing companies were
projected to lose Rs 72, 000 crore in revenues
on selling petrol, diesel , domestic LPG and
kerosene below cost .
But after the June 26 decision , when kerosene
price was raised by Rs 3 per a litre and LPG
rates went up by Rs 35 per cylinder , the
projected revenue loss has come down to Rs
53, 000 crore , provided crude oil ( raw material
for making these products ) stays around USD
75 per barrel, Deora added .
" However , the OMCs ' actual under- recovery
( revenue loss ) will depend upon the
movement of international oil prices during
the current financial year , " he said.
decontrol : Deora
16 Nov, 2010, 1516 hrs IST , PTI
NEW DELHI: The Government is not
considering freeing diesel pricing from its
control yet, Oil Minister Murli Deora said in
Parliament today .
" Currently , there is no proposal under
consideration to fully decontrol the price of
diesel , " Deora said in a written reply to a
question in the Rajya Sabha here .
State - owned Indian Oil Corp , Hindustan
Petroleum Corp and Bharat Petroleum Corp
sell diesel at a rate which is Rs 2 .62 per litre
below its imported cost , he said.
The Government had, on June 26, decided to
give public sector oil firms freedom to price
petrol and diesel in line with cost . However ,
while petrol pricing was freed with immediate
effect , for diesel it was stated that complete
decontrol will be done in stages .
Deora said the move resulted in price of petrol
going up by Rs 3 .50 a litre in Delhi .
Besides , the government decided to raise the
diesel price by an ad - hoc Rs 2 per litre even
though the difference between the domestic
retail price and imported cost of the fuel was
almost twice that.
Since then , diesel rates have not been
changed, Deora said , without saying as to
when diesel pricing will be freed completely .
Meanwhile, petrol price has risen by Rs 1 .48
per litre on top of the June 26 increase, he
said .
Deora said that for the current fiscal , the
public sector oil marketing companies were
projected to lose Rs 72, 000 crore in revenues
on selling petrol, diesel , domestic LPG and
kerosene below cost .
But after the June 26 decision , when kerosene
price was raised by Rs 3 per a litre and LPG
rates went up by Rs 35 per cylinder , the
projected revenue loss has come down to Rs
53, 000 crore , provided crude oil ( raw material
for making these products ) stays around USD
75 per barrel, Deora added .
" However , the OMCs ' actual under- recovery
( revenue loss ) will depend upon the
movement of international oil prices during
the current financial year , " he said.
Saturday, November 13, 2010
RTGS THRESHHOLD LIMIT
Notifications & Circulars
Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT
Notice Date : 03 November 2010
Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT
RBI/2010-11/259
DPSS (CO) RTGS No.1008/04.04.002/2010-2011
November 03, 2010
Chairman and Managing Director /
Chief Executive Officer of all banks participating in RTGS and NEFT
Madam / Dear Sir,
Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT
Please refer to our earlier circulars DPSS (CO) RTGS No. 729/04.04.002/2006 – 2007 dated December 1, 2006 (introducing the threshold value limit for customer transactions in RTGS to Rs. 1 lakh) and DPSS (CO) No. 611 / 03.01.03 (P) / 2008 – 09 dated October 8, 2008 (levy of service charges for electronic payment products).
2. The Indian RTGS system has displayed tremendous growth in both transactions volume and the values that it has been processing since its inception in March, 2004. With the increasing number of electronic payment transactions, it has become expedient to position the Indian RTGS system primarily for processing and settling large value payment orders. Further, RBI has set up a robust retail electronic funds transfer system in the form of National Electronic Funds Transfer (NEFT) system, with near real-time settlement finality with 11 settlement cycles in a day.
3. It has, therefore, been decided in consultation with system participants to increase the threshold value limit for RTGS transactions from the present limit of ` 1 lakh to ` 2 lakhs. As an incentive to customers to move their transactions to NEFT, a new value band in the ` 1 lakh to ` 2 lakh segment has been created, with customers having to pay lower charges vis-à-vis RTGS transactions. The details of the existing service charges and the revised service charges are given below :
System
Value Band
Customer Charges
RTGS
Existing
Revised
` 1 lakh to ` 2 lakhs
` 25
-
above ` 2 lakhs to ` 5 lakhs
` 25
` 25
above ` 5 lakhs
` 50
` 50
NEFT
up to ` 1 lakh
` 5
` 5
above ` 1 lakh to ` 2 lakhs
` 25
`15
above ` 2 lakhs
` 25
` 25
4. The service charges in the value band ` 1 lakh to ` 2 lakhs at ` 15/- per transaction in NEFT, effectively provides a saving of ` 10/- per transaction to the customer. Thus, the special niche value band created in NEFT, is a value proposition for customers providing funds transfer in a timely manner with wider geographical coverage at a lesser cost. This measure would also significantly contribute to further improving the efficiency of the RTGS system.
5. The revised threshold limits for customer transactions in RTGS system and revised NEFT service charges will be implemented with effect from November 15, 2010.
6. All member banks are advised to encourage customers to take advantage of this facility.
Please acknowledge receipt.
Yours faithfully,
(G. Padmanabhan)
Chief General Manager
__________________
Note : Circular DPSS (CO) No. 611 / 03.01.03 (P) / 2008 – 09 dated October 8, 2008 is mentioned below
Levy of Service Charges for Electronic Payment Products and Outstation Cheque Collection
RBI / 2008-09 / 207
DPSS.CO.No. 611 / 03.01.03(P) / 2008-09
October 8, 2008
The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including RRBs /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks
Madam / Dear Sir,
Levy of Service Charges for Electronic Payment Products and
Outstation Cheque Collection
With immediate effect, the framework of charges to be levied by banks for offering various electronic products and for outstation cheque collection service shall be as under : –
1. Electronic products
a) Inward RTGS / NEFT / ECS transactions – free, no charge to be levied.
b) Outward transactions –
(i) RTGS – Rs. 1 to 5 lakh – not exceeding Rs. 25 per transaction
– Rs. 5 lakh and above – not exceeding Rs. 50 per transaction
(ii) NEFT – Up to Rs. 1 lakh – not exceeding Rs. 5 per transaction
– Rs. 1 lakh and above – not exceeding Rs. 25 per transaction
c) Banks may prescribe charges not higher than cheque return charges for ECS debit returns.
d) These charges shall be applicable for all types of transactions, including inter-bank funds transfers.
2. Outstation cheque collection
a) – Up to Rs. 10,000 – not exceeding Rs. 50 per instrument
– Rs. 10,000 to Rs. 1,00,000 – not exceeding Rs. 100 per instrument
– Rs. 1,00,001 and above – not exceeding Rs. 150 per instrument
b) The above charges will be all inclusive. No additional charges such as courier charges, out of pocket expenses, etc., should be levied from the customers.
c) To reduce the clearing cycle and to promote electronic modes of payment, the drawee banks should use electronic modes like RTGS / NEFT, wherever available, to remit proceeds to the collecting bank branch.
d) Banks may make increased use of Speed Clearing and National Clearing facilities for providing efficient service.
3. The above charges are applicable only to transactions originated and payable within India.
4. The provisions of this circular shall not be applicable to cash handling charges levied by banks for handling large value cash transactions.
5. No bank should refuse to offer the products to its customers or decline to accept outstation cheques deposited by its customers for collection.
6. These Directions are issued by the Reserve Bank of India, in exercise of the powers conferred by Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully
(G. Padmanabhan)
Chief General Manager
Notification No : DPSS (CO) RTGS No.1008/04.04.002/2010-2011
Source : ,
Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT
Notice Date : 03 November 2010
Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT
RBI/2010-11/259
DPSS (CO) RTGS No.1008/04.04.002/2010-2011
November 03, 2010
Chairman and Managing Director /
Chief Executive Officer of all banks participating in RTGS and NEFT
Madam / Dear Sir,
Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT
Please refer to our earlier circulars DPSS (CO) RTGS No. 729/04.04.002/2006 – 2007 dated December 1, 2006 (introducing the threshold value limit for customer transactions in RTGS to Rs. 1 lakh) and DPSS (CO) No. 611 / 03.01.03 (P) / 2008 – 09 dated October 8, 2008 (levy of service charges for electronic payment products).
2. The Indian RTGS system has displayed tremendous growth in both transactions volume and the values that it has been processing since its inception in March, 2004. With the increasing number of electronic payment transactions, it has become expedient to position the Indian RTGS system primarily for processing and settling large value payment orders. Further, RBI has set up a robust retail electronic funds transfer system in the form of National Electronic Funds Transfer (NEFT) system, with near real-time settlement finality with 11 settlement cycles in a day.
3. It has, therefore, been decided in consultation with system participants to increase the threshold value limit for RTGS transactions from the present limit of ` 1 lakh to ` 2 lakhs. As an incentive to customers to move their transactions to NEFT, a new value band in the ` 1 lakh to ` 2 lakh segment has been created, with customers having to pay lower charges vis-à-vis RTGS transactions. The details of the existing service charges and the revised service charges are given below :
System
Value Band
Customer Charges
RTGS
Existing
Revised
` 1 lakh to ` 2 lakhs
` 25
-
above ` 2 lakhs to ` 5 lakhs
` 25
` 25
above ` 5 lakhs
` 50
` 50
NEFT
up to ` 1 lakh
` 5
` 5
above ` 1 lakh to ` 2 lakhs
` 25
`15
above ` 2 lakhs
` 25
` 25
4. The service charges in the value band ` 1 lakh to ` 2 lakhs at ` 15/- per transaction in NEFT, effectively provides a saving of ` 10/- per transaction to the customer. Thus, the special niche value band created in NEFT, is a value proposition for customers providing funds transfer in a timely manner with wider geographical coverage at a lesser cost. This measure would also significantly contribute to further improving the efficiency of the RTGS system.
5. The revised threshold limits for customer transactions in RTGS system and revised NEFT service charges will be implemented with effect from November 15, 2010.
6. All member banks are advised to encourage customers to take advantage of this facility.
Please acknowledge receipt.
Yours faithfully,
(G. Padmanabhan)
Chief General Manager
__________________
Note : Circular DPSS (CO) No. 611 / 03.01.03 (P) / 2008 – 09 dated October 8, 2008 is mentioned below
Levy of Service Charges for Electronic Payment Products and Outstation Cheque Collection
RBI / 2008-09 / 207
DPSS.CO.No. 611 / 03.01.03(P) / 2008-09
October 8, 2008
The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including RRBs /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks
Madam / Dear Sir,
Levy of Service Charges for Electronic Payment Products and
Outstation Cheque Collection
With immediate effect, the framework of charges to be levied by banks for offering various electronic products and for outstation cheque collection service shall be as under : –
1. Electronic products
a) Inward RTGS / NEFT / ECS transactions – free, no charge to be levied.
b) Outward transactions –
(i) RTGS – Rs. 1 to 5 lakh – not exceeding Rs. 25 per transaction
– Rs. 5 lakh and above – not exceeding Rs. 50 per transaction
(ii) NEFT – Up to Rs. 1 lakh – not exceeding Rs. 5 per transaction
– Rs. 1 lakh and above – not exceeding Rs. 25 per transaction
c) Banks may prescribe charges not higher than cheque return charges for ECS debit returns.
d) These charges shall be applicable for all types of transactions, including inter-bank funds transfers.
2. Outstation cheque collection
a) – Up to Rs. 10,000 – not exceeding Rs. 50 per instrument
– Rs. 10,000 to Rs. 1,00,000 – not exceeding Rs. 100 per instrument
– Rs. 1,00,001 and above – not exceeding Rs. 150 per instrument
b) The above charges will be all inclusive. No additional charges such as courier charges, out of pocket expenses, etc., should be levied from the customers.
c) To reduce the clearing cycle and to promote electronic modes of payment, the drawee banks should use electronic modes like RTGS / NEFT, wherever available, to remit proceeds to the collecting bank branch.
d) Banks may make increased use of Speed Clearing and National Clearing facilities for providing efficient service.
3. The above charges are applicable only to transactions originated and payable within India.
4. The provisions of this circular shall not be applicable to cash handling charges levied by banks for handling large value cash transactions.
5. No bank should refuse to offer the products to its customers or decline to accept outstation cheques deposited by its customers for collection.
6. These Directions are issued by the Reserve Bank of India, in exercise of the powers conferred by Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully
(G. Padmanabhan)
Chief General Manager
Notification No : DPSS (CO) RTGS No.1008/04.04.002/2010-2011
Source : ,
Tuesday, November 9, 2010
Oil PSUs raise petrol price by 31 paise
OIL & GAS
Oil PSUs raise petrol price by 31 paise
9 Nov , 2010, 0634 hrs IST , ET Bureau
NEW DELHI : State - run oil marketers have raised
petrol prices by approximately 31- 33 paise a
litre , the fourth time since the government
lifted control on pricing of the motor fuel on
June 25.
Hindustan Petroleum revised its pump price by
31 paise on Monday and flagship refiner -
marketer Indian Oil Corporation will do so from
midnight , while Bharat Petroleum will follow
suit on Tuesday .
The companies are staggering their revisions to
avoid allegations of cartelization by state - run
firms, which control almost 90% of the market .
“We are increasing petrol price because of
sharp rise in price of crude oil, ” IOC chairman
B M Bansal said on Monday. In the previous
three increases on September 8 , September 21
and October 17, IOC had raised petrol price by
an aggregate of Rs 1 . 16 a litre.
The increase is less than a third of the Rs 1 .10
the state run marketers are losing on each litre
of petrol .
International crude has climbed to $ 87 per
barrel . Though officially the companies are free
to revise petrol prices in tune with price of
international crude , the companies still are
“advised ” against any steep hike .
Oil PSUs raise petrol price by 31 paise
9 Nov , 2010, 0634 hrs IST , ET Bureau
NEW DELHI : State - run oil marketers have raised
petrol prices by approximately 31- 33 paise a
litre , the fourth time since the government
lifted control on pricing of the motor fuel on
June 25.
Hindustan Petroleum revised its pump price by
31 paise on Monday and flagship refiner -
marketer Indian Oil Corporation will do so from
midnight , while Bharat Petroleum will follow
suit on Tuesday .
The companies are staggering their revisions to
avoid allegations of cartelization by state - run
firms, which control almost 90% of the market .
“We are increasing petrol price because of
sharp rise in price of crude oil, ” IOC chairman
B M Bansal said on Monday. In the previous
three increases on September 8 , September 21
and October 17, IOC had raised petrol price by
an aggregate of Rs 1 . 16 a litre.
The increase is less than a third of the Rs 1 .10
the state run marketers are losing on each litre
of petrol .
International crude has climbed to $ 87 per
barrel . Though officially the companies are free
to revise petrol prices in tune with price of
international crude , the companies still are
“advised ” against any steep hike .
Monday, September 20, 2010
IOC wants diesel price freed up before share sale
NEW DELHI: India's top state-run refiner, Indian Oil Corp, wants the government to free up diesel prices before its $2-billion-plus share sale to raise the maximum funds from the offer, the company's chairman said on Monday.
The sale of a 10 percent stake by the government, along with the firm's plan to sell an additional 10 percent of fresh shares, should come in January or February, B.M. Bansal told Reuters. New Delhi now holds 78.92 percent in IOC, which is India's biggest fuel retailer, with a market value of $22.5 billion.
In June, India gave autonomy to oil firms to set petrol prices and raised prices of diesel, kerosene and cooking gas. It also decided to free up diesel prices but gave no time frame to implement the decision.
"We hope the government will deregulate diesel prices before the FPO (follow-on public offer)," Bansal told Reuters. "It will help a better valuation."
India's oil ministry has approved the sale of a 5 percent stake in Oil and Natural Gas Co. (ONGC) and 10 percent in IOC. It has also allowed IOC to raise funds through sale of an additional 10 percent of the expanded share capital.
Bansal said IOC aimed to raise about 100 billion rupees (about $2.2 billion) through the share sale, and wants to appoint a lead manager for the planned issue in November.
"We have to take board approval and then shareholders' approval for the shares sale," he said. "Then we have to appoint lead managers for the issue. I think we should be in a position to launch the FPO in January-February."
India's oil secretary, S. Sundareshan, recently said the government would take a view on freeing up diesel prices before the share sale of IOC and ONGC.
"This is a rare window of opportunity to fix anomalies in diesel pricing," Bansal added. "Growth in the inflation rate is softening and global crude oil prices are somewhat stable ... this is the right time."
FUELLING LOSSES
IOC's current revenue loss on the sale of a litre of diesel is two rupees, or about 5 percent below its desired market price.
India's wholesale price index (WPI) rose 8.5 percent in August compared with 9.8 percent in July after a change in the basket used as a basis for calculations, and the government expects the inflation rate to soften to 6 percent by December.
U.S. crude for October, which expires on Tuesday, added 5 cents to $73.71 a barrel by 0832 GMT, while ICE Brent for November rose 3 cents to $78.18.
Bearing revenue losses on fuel sales at state-mandated prices has cost IOC dear. In the June quarter, it posted a net loss of 33.88 billion rupees despite a discount of 36.71 billion rupees it got on crude and product purchases from ONGC, Oil India and GAIL (India).
The sale of a 10 percent stake by the government, along with the firm's plan to sell an additional 10 percent of fresh shares, should come in January or February, B.M. Bansal told Reuters. New Delhi now holds 78.92 percent in IOC, which is India's biggest fuel retailer, with a market value of $22.5 billion.
In June, India gave autonomy to oil firms to set petrol prices and raised prices of diesel, kerosene and cooking gas. It also decided to free up diesel prices but gave no time frame to implement the decision.
"We hope the government will deregulate diesel prices before the FPO (follow-on public offer)," Bansal told Reuters. "It will help a better valuation."
India's oil ministry has approved the sale of a 5 percent stake in Oil and Natural Gas Co. (ONGC) and 10 percent in IOC. It has also allowed IOC to raise funds through sale of an additional 10 percent of the expanded share capital.
Bansal said IOC aimed to raise about 100 billion rupees (about $2.2 billion) through the share sale, and wants to appoint a lead manager for the planned issue in November.
"We have to take board approval and then shareholders' approval for the shares sale," he said. "Then we have to appoint lead managers for the issue. I think we should be in a position to launch the FPO in January-February."
India's oil secretary, S. Sundareshan, recently said the government would take a view on freeing up diesel prices before the share sale of IOC and ONGC.
"This is a rare window of opportunity to fix anomalies in diesel pricing," Bansal added. "Growth in the inflation rate is softening and global crude oil prices are somewhat stable ... this is the right time."
FUELLING LOSSES
IOC's current revenue loss on the sale of a litre of diesel is two rupees, or about 5 percent below its desired market price.
India's wholesale price index (WPI) rose 8.5 percent in August compared with 9.8 percent in July after a change in the basket used as a basis for calculations, and the government expects the inflation rate to soften to 6 percent by December.
U.S. crude for October, which expires on Tuesday, added 5 cents to $73.71 a barrel by 0832 GMT, while ICE Brent for November rose 3 cents to $78.18.
Bearing revenue losses on fuel sales at state-mandated prices has cost IOC dear. In the June quarter, it posted a net loss of 33.88 billion rupees despite a discount of 36.71 billion rupees it got on crude and product purchases from ONGC, Oil India and GAIL (India).
Tuesday, July 20, 2010
'Adulterating fuel outlets will soon be out of biz
A day after the details of the new de-regularised petrol pricing regime are worked out, B M Bansal, chairman of the largest company shares his outlook on the opportunities and threats opened by the entry of private players into fuel retailing. Excerpts from an interview with DNA:
Will IOC become another BSNL as private players eat into your market share?
Definitely, when there are more players in the market, the share of existing players will come down. To what extent it will come down to has to be seen because IOC has the edge on others as far as infrastructure is concerned, in terms of pipelines, distributed refineries etc.. Besides, as a public sector company, we are expected to supply to far away, remote locations like Leh, Manipur etc.. So if you are talking about level playing field, the government should force others also to sell in places that are disadvantageous or unattractive from a commercial point of view. Only then will it be fair competition.
The fight cannot be just in urban areas.
Which areas do you expect competition to come in?
Competition will there in price, quantity, quality and the behaviour of the sales persons... To match up, we are beautifying our outlets. On quality, there may be some perception that the private players are giving better product. But the product is being made to BIS specifications, both by us and them. We are carrying out many checks. Now we are also going for automation using remote sensors placed in the [storage tanks of] retail outlets. We can monitor it in real time from our headquarters. If there is a sudden increase in quantity, we can make out that something has been added to the stock.
Can the entry of private players impact your marketing margin, which has so far been more or less stable due to lack of competition?
If there is a price war, it can dampen the margins.
Your Achilles' heel, which the private operators highlight in their advertisements, is adulteration at the retail end. How do you intend to tackle it?
With this competition coming, our distributors will realize that they will soon be out of business because consumers will start going to other outlets. If you feel that you get a lower mileage when you go to a particular pump, you will not go there. Such pumps will end up with only odd customers. Such pumps will soon turn unviable. Distributors have to see the long term impact.
What is your expectation on diesel deregulation?
The ministry is saying diesel will also be deregulated (from government price controls) in due course.
Even after petrol and diesel price deregulation, there continues to be the overhang of cooking fuel subsidies on your finances. What is the ideal solution out of this mess?
The ideal solution will be that if the government wants to keep some product under the subsidy regime, they must put the provisions in the budget itself so that there is no uncertainty for the oil companies. Even the provision does not entirely cover all possibilities, at least to some extent, they should make a budgetary provision. Besides this, they should make it very clear that whatever under-recoveries are made will be 100% met by the government. If they don't give the organization a free hand, how will it know what its cash flow and profit are going to be? You cannot have everything.
One of the criticisms against the subsidy regime has been that it robs companies like yours from predictable cash flows, preventing investments for growth. Will that change once diesel too is freed up?
For any organisation to grow, expansion, de-bottlenecking and new units are must. This is a growing sector, you must put up new refineries, outlets and pipelines. Continuous investment is required and if you can't make profits you cannot invest.
You have been prevented from investing?
Yes, for the last two-three years, it has been the case. At one time, our borrowing had gone to Rs 70,000 crore and we were not sure whether we would be able to buy crude. The banks were showing reluctance to loan more money... At that time, were thinking of putting up a refinery and petrochemical project in Paradip, but we had to keep the petrochemical project on hold due to this. A number of projects were kept on hold or slowed down.
Now that there is more visibility over cash flows, which areas would you be investing in?
Once the Paradip refinery is completed, there will not be any more refinery expansion for the next 4-5 years, we won't be putting up any more refineries. For now, our focus will only be on exploration and production, petrochemicals and renewables.
What are your expansion plans for your retail network?
We have more than 18,000 [motor fuel] outlets now and we have been adding around 700 per year for the last few years. It will remain the same, but 60% of the new ones will be in rural areas because in urban areas, the number of outlets is so high that a number of them are becoming unviable... As for LPG, the government's target is to cover 75% of the population by 2015, with a minimum of 60% in any state.
Your public float is around 20%, including cross holdings by other government companies. With the new 25% threshold, will the government be divesting its stake soon?
Government will have to dilute 5% more and when the government does it, we may also issue some fresh equity. IOC would like to raise around Rs 10,000-12,000 crore [by issuing fresh shares] within one year.
Will IOC become another BSNL as private players eat into your market share?Definitely, when there are more players in the market, the share of existing players will come down. To what extent it will come down to has to be seen because IOC has the edge on others as far as infrastructure is concerned, in terms of pipelines, distributed refineries etc.. Besides, as a public sector company, we are expected to supply to far away, remote locations like Leh, Manipur etc.. So if you are talking about level playing field, the government should force others also to sell in places that are disadvantageous or unattractive from a commercial point of view. Only then will it be fair competition.
The fight cannot be just in urban areas.
Which areas do you expect competition to come in?
Competition will there in price, quantity, quality and the behaviour of the sales persons... To match up, we are beautifying our outlets. On quality, there may be some perception that the private players are giving better product. But the product is being made to BIS specifications, both by us and them. We are carrying out many checks. Now we are also going for automation using remote sensors placed in the [storage tanks of] retail outlets. We can monitor it in real time from our headquarters. If there is a sudden increase in quantity, we can make out that something has been added to the stock.
Can the entry of private players impact your marketing margin, which has so far been more or less stable due to lack of competition?
If there is a price war, it can dampen the margins.
Your Achilles' heel, which the private operators highlight in their advertisements, is adulteration at the retail end. How do you intend to tackle it?
With this competition coming, our distributors will realize that they will soon be out of business because consumers will start going to other outlets. If you feel that you get a lower mileage when you go to a particular pump, you will not go there. Such pumps will end up with only odd customers. Such pumps will soon turn unviable. Distributors have to see the long term impact.
What is your expectation on diesel deregulation?
The ministry is saying diesel will also be deregulated (from government price controls) in due course.
Even after petrol and diesel price deregulation, there continues to be the overhang of cooking fuel subsidies on your finances. What is the ideal solution out of this mess?
The ideal solution will be that if the government wants to keep some product under the subsidy regime, they must put the provisions in the budget itself so that there is no uncertainty for the oil companies. Even the provision does not entirely cover all possibilities, at least to some extent, they should make a budgetary provision. Besides this, they should make it very clear that whatever under-recoveries are made will be 100% met by the government. If they don't give the organization a free hand, how will it know what its cash flow and profit are going to be? You cannot have everything.
One of the criticisms against the subsidy regime has been that it robs companies like yours from predictable cash flows, preventing investments for growth. Will that change once diesel too is freed up?
For any organisation to grow, expansion, de-bottlenecking and new units are must. This is a growing sector, you must put up new refineries, outlets and pipelines. Continuous investment is required and if you can't make profits you cannot invest.
You have been prevented from investing?
Yes, for the last two-three years, it has been the case. At one time, our borrowing had gone to Rs 70,000 crore and we were not sure whether we would be able to buy crude. The banks were showing reluctance to loan more money... At that time, were thinking of putting up a refinery and petrochemical project in Paradip, but we had to keep the petrochemical project on hold due to this. A number of projects were kept on hold or slowed down.
Now that there is more visibility over cash flows, which areas would you be investing in?
Once the Paradip refinery is completed, there will not be any more refinery expansion for the next 4-5 years, we won't be putting up any more refineries. For now, our focus will only be on exploration and production, petrochemicals and renewables.
What are your expansion plans for your retail network?
We have more than 18,000 [motor fuel] outlets now and we have been adding around 700 per year for the last few years. It will remain the same, but 60% of the new ones will be in rural areas because in urban areas, the number of outlets is so high that a number of them are becoming unviable... As for LPG, the government's target is to cover 75% of the population by 2015, with a minimum of 60% in any state.
Your public float is around 20%, including cross holdings by other government companies. With the new 25% threshold, will the government be divesting its stake soon?
Government will have to dilute 5% more and when the government does it, we may also issue some fresh equity. IOC would like to raise around Rs 10,000-12,000 crore [by issuing fresh shares] within one year.
Saturday, June 26, 2010
Revised rates of HSD/MS in Kurnool - 1 Area
I am reproducing the sms sent by local sales officer....Please go throught it....The prices is meant only for IOCL Kurnool - 1 Area wef 16/June/2010
DRC NAMEOF THE MARKET
M.S. HSD XM-HSD XP-MS 40929 KALLUR, Kurnool dist 56.63 41.08 42.83 58.88 41213 KOSIGI 56.54 40.99 42.75 58.79 40365 KURNOOL 56.69 41.13 42.89 58.94 40478 NANDIKOTTUR 56.73 41.17 42.93 58.99 40525 PATTIKONDA 56.38 40.85 42.61 58.64 41007 PEDDAHARIVANAM 56.48 40.95 42.70 58.74 41410 RANGAPURAM 56.58 41.03 42.79 58.83 41212 SUNKESULA 56.60 41.05 42.81 58.85 41083 TUGGALI 56.34 40.82 42.57 58.60 40776 YEMMIGANUR 56.54 41.00 42.75 58.79
DRC NAMEOF THE MARKET M.S. HSD XM-HSD XP-MS 40929 KALLUR, Kurnool dist 56.63 41.08 42.83 58.88 41213 KOSIGI 56.54 40.99 42.75 58.79 40365 KURNOOL 56.69 41.13 42.89 58.94 40478 NANDIKOTTUR 56.73 41.17 42.93 58.99 40525 PATTIKONDA 56.38 40.85 42.61 58.64 41007 PEDDAHARIVANAM 56.48 40.95 42.70 58.74 41410 RANGAPURAM 56.58 41.03 42.79 58.83 41212 SUNKESULA 56.60 41.05 42.81 58.85 41083 TUGGALI 56.34 40.82 42.57 58.60 40776 YEMMIGANUR 56.54 41.00 42.75 58.79
Is Fuel Really Costly?
My friend sridhar has sent me some good calc as an sms. I am reproducing the same below...
Is Fuel Really Costly? I filled up my vehicle's fuel tank, and I thoght fuel has become really expensive. But when I compared it with other liquids note with some calculations, I felt a little better. Here are the results below Petrol: Rs.55.02per litre. Coca Cola 330ml can: Rs.25 i.e. Rs.76 per litre. Nariyal paani 200ml Rs.25 i.e. Rs. 125 per litre. Pantene conditioner 400ml Rs.165 i.e. Rs.413 per litre. Parachute oil 100ml Rs21 i.e. Rs210.00 per litre And this is the REAL KICKER Lexmark inkjet color ink cartridge 21ml Rs.950 i.e. Rs.45238 per litre!!! So don't cursePetrol rates? be glad your byke/car doesn't run on ink cartridge, coke, hair oil etc..
Tuesday, June 22, 2010
EGoM meeting on June 25 to discuss decontrol of petrol price
Petroleum Minister Murli Deora has already asked states to lower sales tax on petrol and diesel to cushion consumers from the impact of fuel price hike, if any.
An empowered Group of Ministers will meet here on Friday and is likely to consider freeing petrol prices from government control, official sources said.
Petrol price will go up Rs. 3.73 a litre if the domestic prices are aligned with international rates.
The sources said domestic retail prices are benchmarked at close to $ 60 per barrel crude oil price while the global rates currently are over $ 77 a barrel.
Petroleum Minister Murli Deora has already asked states to lower sales tax on petrol and diesel to cushion consumers from the impact of fuel price hike, if any.
“A rise in the international oil prices exerts an upward pressure on domestic prices of petroleum products,” he wrote to states. “Ad valorem rates of VAT imposed by the state government further aggravates the impact of international oil prices on the consumers.”
Thursday, June 10, 2010
EGoM meeting on fuel pricing likely on June 17
An Empowered Group of Ministers (EGoM) may meet on June 17 to consider freeing petrol prices from government control and possibly giving limited autonomy to oil firms to price diesel closer to market rates.
Also on the cards is a Rs 25 per cylinder hike in domestic cooking gas (LPG) rates in an effort to align retail prices closer to their cost, sources in know of the development said.
The EGoM headed by Finance Minister Pranab Mukherjee may decide to free petrol price from government control for the first time since 2004, when the UPA in its first stint decided to price auto fuels below their imported cost to keep inflation under check.
This move, going up by the current international crude rates, will result in a Rs 3.35 per litre increase in price of petrol in Delhi, sources said.
The EGoM, which could not reach a decision at its first meeting on June 7 as key ministers like Railway Minister Mamata Banerjee and Agriculture Minister Sharad Pawar were absent, may also decide to give oil companies freedom to price diesel if international oil price stayed below $ 90 per barrel.
If approved, diesel rates would immediately rise by Rs 3.49 per litre as current retailing selling price is calculated on $ 60 per barrel-level of crude oil prices while the actual rate is $ 72 per barrel now, they said.
If the crude climbs to $ 90 per barrel, diesel price in Delhi would rise by over Rs 7 per liter over the current selling price of Rs 38.10 a litre. Petrol in Delhi currently costs Rs 47.93 per litre.
The government would step in if crude oil crosses $ 90 per barrel and prices would be moderated either through cut in excise and customs duty or through subsidy from exchequer.
Sources said there may not be any problem in freeing pricing of petrol, which is considered a fuel used by the well-off, there were doubts on diesel which is used in transport sector and thus has inflationary impact.
If consensus at the EGoM is against even giving limited freedom to oil companies, then the government may settle for a Rs 2 per litre hike and try to build consensus for freeing the fuel around Budget time in 2011.
Ms. Banerjee, who was away in Kolkata at the time of the first EGoM meeting, had communicated that her party, the Trinamool Congress, was against ?any steep hike? in diesel prices and wanted domestic LPG and kerosene consumers to be spared, the source said.
Mr. Pawar, not known for blocking reforms, could not attend the meeting because of illness, while DMK leader and Chemicals and Fertilizer Minister M.K. Alagiri was present.
The EGoM had at the first meeting gone into the report of the expert group headed by Kirit Parikh that called for freeing petrol and diesel prices and a steep Rs 100 per cylinder hike in LPG rates and a Rs 6 per litre increase in kerosene prices.
Oil ministry made a presentation on the impact of the Parikh Committee?s recommendation, projecting a revenue loss of Rs 72,300 crore to state oil firms if petrol, diesel, domestic LPG and kerosene continue to be sold at rates below the imported cost.
The EGoM also discussed the impact implementing the Committee?s report would have on inflation, sources said, adding that freeing auto fuel prices would lead to a 1.4 per cent rise in the Wholesale Price Index (WPI). In April, WPI-based inflation was 9.59 per cent.
State-owned Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum currently lose Rs 203 crore per day on selling fuel below imported cost. They currently sell petrol at a loss of Rs 3.35 a litre, while the under-recovery is Rs 3.49 per litre of diesel, Rs 18.82 per litre of PDS kerosene and Rs 261.90 on every 14.2-kg LPG cylinder.
source : http://beta.thehindu.com/business/Economy/article451985.ece?homepage=true
Thursday, May 6, 2010
Oil marketing firms to get Rs. 14,000 crore more
The Finance Ministry on Wednesday agreed to give an additional Rs.14,000 crore to oil marketing companies (OMCs) —Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — to make up for the losses incurred on sale of fuel and cooking gas at subsidised rates.
The OMCs have lost Rs.31,621 crore on selling domestic LPG and kerosene below cost in 2009-10. Of this, the Finance Ministry had previously released Rs.12,000 crore in cash and on Wednesday agreed to give an additional Rs.14,000 crore.
“We had sought Rs.19,620 crore in compensation but the Finance Ministry has agreed to give Rs.14,000 crore,'' Petroleum and Natural Gas Minister Murli Deora said.
During the day, Petroleum Secretary S. Sundareshan met Expenditure Secretary Sushma Nath seeking Rs.19,620.95 crore to fully compensate oil marketing companies' revenue loss on PDS kerosene and domestic LPG in 2009-10.
The three OMCs lost Rs.46,051 crore on selling petrol, diesel, domestic LPG and PDS kerosene below imported cost in 2009-10.
An Empowered Group of Minister headed by Finance Minister Pranab Mukherjee is likely to meet next week to look at freeing the auto fuel prices and ways of meeting the balance revenue loss.
source : http://beta.thehindu.com/business/article422517.ece?homepage=true
Monday, April 26, 2010
Global oil demand to increase by five million bpd: Kuwait
Global oil demand will increase by five million barrels per day in the next five years, and China and India will lead the growth in emerging markets, the Kuwaiti oil minister said at the opening ceremony of the 18th Middle East Oil and Gas Conference here Monday.
“The fastest growth will be in Asia, where consumption is expected to account for more than 30 percent of the global demand,” Xinhua reported quoting Oil Minister Sheikh Ahmad Al—Abdullah Al—Ahmad Al—Sabah.
Mr. Sheikh Ahmad said the Middle East countries, which together hold 65 percent of the world’s proven reserves, would remain the main provider for the growing world demand.
He said China and India will lead the growth in emerging markets, with China’s crude imports expected to reach around seven million barrels per day by 2015.
Kuwait, the fourth largest exporter of the Organisation of Petroleum Exporting Countries, has inked an agreement with China to build a joint refinery in China’s southern Guangdong province.
Expected to be completed in 2013, the unit would have a crude oil refining capacity of 300,000 barrels per day and produce one million tonnes of ethylene per year.
More than 550 participants, including government officials and oil company representatives, are gathering for the three—day Mideast oil and gas conference focusing on the latest concerns and developments in the oil and gas industry.
Source:http://beta.thehindu.com/business/Economy/article410825.ece
Saturday, April 24, 2010
IOC to market bio-lubricant next year
Indian Oil Corporation (IOC), the nation's biggest oil marketer and refiner, will launch its first biodegradable lubricant next year. The company is conducting trial runs on the lubricant and would soon evolve a marketing and branding strategy for the product.
The product would be marketed as a separate brand. "Lab tests for the product are over. We are doing extensive engine trails at present. In the next one year, the product should hit the market under a suitable brand name," said a senior executive from IOC. The research on the product had begun two years earlier.
A biodegradable lubricant can be vegetable oil-based or based on synthetic esters manufactured from modified renewal oils, from mineral oil-based products. Most liquid lubricants used at present all over the world are petroleum-based mineral oils. "Use of biodegradable lubricants which are mainly derived from genetically modified vegetable oils, would be used in agricultural and forest machinery, and the transport sector," said a Mumbai-based analyst.
There are 44 lubricant companies in the market including Total, Gulf, Shell and Vedol, besides brands from the three government-controlled oil companies - IOC, Bharat Petroleum Corporation and Hindustan Petroleum Corporation - which together hold over 50 per cent share. IOC, however, is the dominant company in the country's lubricant market, with its Servo brand of lubricants. The Servo range includes over 500 lubricants and 1,200 formulations.
The total lubricant market in India is 1.6 billion litres, of which automotive use is about 950 million litres. Castrol India, the other dominant player, claims to have 27 per cent of the market. While analysts say Castrol cannot match public sector units in coverage due to their 30,000-strong petrol station network, it has strong distribution presence through workshops and spare parts suppliers-over 70,000 outlets, which compares well with the 40,000-plus for IOC's Servo.
IOC is also conducting research in areas like oil refining technology and producing diesel from algae. The company will shortly commission a project at its Faridabad centre, where it will install technology for coal gassification and production of ethanol from biomass. The company is also in talks with international energy institutes to tie up for research and development.
For further info on Bio-Lubricant please do visit at http://www.benefuel.net/bio_lube.html
Wednesday, April 7, 2010
Electric car “filling station”
The first public trial of a system that “refills” electric cars in minutes will be launched this month. The Californian company Better Place will test its automated battery-swap stations in Tokyo.
It is the latest element in the company's ambitious plans to build the world's first infrastructure networks for electric cars by the start of next year.
Globally, road vehicles generate around a fifth of carbon dioxide emissions. The figure is the same for the U.K. According to a study for the country's Department for Transport, widespread adoption of electric vehicles with a range of 48 km or more could halve road transport emissions.
One of the biggest challenges, however, to the large-scale implementation of electric cars is the problem of infrastructure for recharging.
Better Place has come up with a model which involves building networks of charging points and battery-switch stations. At these a robotic mechanism will swap the empty battery in a car for a fully charged one. This means electric cars can be “refilled” in minutes, rather than taking several hours to charge their batteries.
On April 26 in Tokyo, Better Place will begin the first public trial of its battery-switching stations.— © Guardian Newspapers Limited, 2010
Thursday, March 4, 2010
"SERVO 4T Car in a Can" Promo offer
- Participation in this offer implies acceptance of the following Terms and Conditions.
- Entry to this offer shall be treated as void wherever such offers are prohibited under local laws.
- This offer is open to Indian Citizens only, who are major as on 1st February 2010, and residing in India.
- The participation in this offer is voluntary and by entering this offer, you agree that the information provided by you may be used by Indian Oil Corporation Ltd. for administration of the draw or to carry out research about this offer or communicate future promotions to you.
- Employees of Indian Oil Corporation Ltd. and their families, IndianOil Dealers and Distributors, Servo CFAs, all Servo Stockists are not eligible to participate in this promo. Employees of Advertising Agencies of Indian Oil Corporation Ltd., and channel partners, Service providers/Event managers etc. associated with this offer also shall not be eligible to take part.
- Only those customers, who purchase a 1-litre or 900 ml pack of SERVO 4T or SERVO 4T Zoom with promotion offer label having scratch option and unique number code on the reverse of the peel-off portion of the label (promo pack) at any IndianOil/IBP/Assam Oil Division retail outlets/bazaar shops, are eligible to participate in this offer. SERVO 4T or 4T Zoom regular packs (without the promotion labels) are also available in the market during the promotional period and this offer is not applicable to them. In case any person purchases these regular packs, which are not having scratch option and unique number code, he/she shall be deemed not to have participated in this offer.
- To participate in this offer a customer has to purchase a 1-litre or 900 ml pack of SERVO 4T or SERVO 4T Zoom having scratch option and unique number code on the label and SMS ‘SERVO
to the short code 53636. The is the number on the back of the perforated portion of the label of the container. For Eg: If the given on the label is 1234567 the customer has to SMS, SERVO 1234567 to the number 53636. The space between SERVO and the has to be maintained if not an error message will be received by the customer. - The customer can also scratch the specified portion of the label to reveal the cash back amount eligible and handover this portion to the retailer, to get the assured cash back from the retailer.
- Participation in the ‘SERVO 4T Car in a Can’ offer through sending SMS is valid only up to 30th June 2010 across the States and Union Territories of India (except in those areas/locations/states where such offers are prohibited under local laws). The SMS Entries sent by Customers after 12-00 midnight of 30th June 2010 would invalid and do not qualify for inclusion in the promotional offer.
- It is reiterated that the “SERVO 4T Car in a Can” offer through SMS shall end on 30th June 2010. Beyond this date, in case any person purchases containers with this promotional offer and thereafter sends SMS, the same shall be void. This means, those purchasing the containers with the promotional offer label after the above date can not send SMS to win the cars. However, the cash back offer would be valid until the containers having the promotional labels last in the market.
- The participation in this offer is only through the SMS process described above. The SMS facility is available through all major telecom service providers. However, if the customer is unable to send the SMS for whatever reason, Indian Oil Corporation Ltd. shall not be responsible for him/her not being able to participate in this offer.
- SMS entries complete in all respect shall only be accepted. Proof of sending will not be accepted as proof of delivery. Indian Oil Corporation Ltd. shall not be responsible for entries delayed, incomplete or lost due to any technical reasons or otherwise whatsoever.
- The SMS charges as applied by particular telecom service provider shall be incurred by the sender for the SMS being sent, to take part in this offer.
- A customer can make multiple SMS entries for repeat purchases of 1-litre or 900 ml pack of SERVO 4T or SERVO 4T Zoom with promotion offer label. However, each SMS should have the Unique Code pertaining to that specific container purchased.
- The winners of the cars would be decided based a random process defined by Indian Oil Corporation Ltd. and the list of winners would be hosted on the IndianOil website, www.iocl.com, for a period of one month from the date of hosting.
- The prizes offered are
- Hyundai Verna – 1 No.
- Hyundai i10 – 8 Nos.
- In addition to this the customers would also get assured cash back ranging from Rs. 5/- to Rs. 50/- with the purchase of every promo pack.
- The winner is required to produce the peeled-off portion of the original label having the Unique Code to claim the prize. Loss/mutilation of the original label shall disqualify the customer. No photocopies/ duplicate of the label shall be accepted. Only original label having the Unique Code shall be accepted for eligibility of the prizes.
- The winner’s identity would be established through telephone calls made to them over their mobile phone numbers. In case the mobile number has been changed/terminated/blocked/out of reach etc. Indian Oil Corporation Ltd. shall not be responsible for not being able to communicate/handover prizes to the winners.
- The car will be delivered to the winner from select Hyundai authorized dealer showroom on ex-showroom basis. Road Tax, Registration, Insurance, other applicable levies as applicable at the time of Invoicing and all other incidental charges will have to be borne by the winner. Income tax, gift tax or any other statutory levies as may be applicable from time to time, arising out of the free prize of the car, shall be payable by winner. IndianOil or Hyundai Motors are not liable for any of these charges. All required information/documents including the PAN no. etc., as advised by IndianOil, shall be produced by the winners within six weeks from the date of announcing the winners.
- The car will be invoiced in the winner's name only and it cannot be exchanged for cash. The Car shall be provided on as is basis and no up gradation/change of model etc. of the vehicle will be allowed. Any cost incurred towards the accessories preferred shall be borne by the winner.
- The registration of the car prize will be at the sole discretion of the appropriate Road transport Authority. The responsibility to furnish appropriate documents and identification papers is that of the winner.
- Indian Oil Corporation Ltd. shall not be responsible in any manner whatsoever for the manufacturing quality/ warranty/ performance/ after sale service/ suitability of the prize. The prize shall be subject to standard manufacturer’s warranty terms.
- Indian Oil Corporation Ltd. reserves the right to withdraw and/or alter any of the terms and conditions of this offer at any time without prior notice or to replace, wholly or in part, this offer by another offer whether similar to this or not, or to withdraw it altogether. No correspondence shall be entertained on this account.
- No queries/ clarifications/ suggestions/ communication etc. shall be entertained on operation/selection process of this offer, reply if any to be given shall be entirely at the discretion of Indian Oil Corporation Ltd.
- If a prize is unclaimed, declined, disqualified etc. or if a winner forfeits the prize under these terms and conditions, then Indian Oil Corporation Ltd. shall have absolute discretion to decide the utility of unclaimed declined, disqualified etc. prizes if any.
- The prizes of this offer cannot be exchanged/ sold for cash or otherwise howsoever. The prizes are as stated and there are no alternate prizes or cash substitutes. This offer cannot be used in conjunction with any other offer.
- Indian Oil Corporation Ltd., or any of the other agencies involved in this promotion, shall not be liable for any loss or damage whatsoever that may be suffered as a result of participating in the offer or enjoying the prizes or any other matter relating to this offer.
- Indian Oil Corporation Ltd. reserves the right to audit all claims/winning entries to ensure that the Terms and Conditions of this offer have been met and to seek additional information regarding any and all claims and supporting documents.
- The submission of false, incorrect, misleading or fraudulent documentation/ information may result in disqualification from this offer and from future IndianOil offers. Misrepresentation, submission of false, misleading or fraudulent information/ documentation may result in the claimant being subject to civil or criminal liability/proceedings.
- No correspondence, whatsoever shall be entertained by Indian Oil Corporation Ltd., on this offer.
- Each offer rule, given above, shall be severable from each of the other rules, and if any rule is found to be void, invalid, or unenforceable for any reason, the remaining rules shall remain in full force and effect.
- The decisions of Indian Oil Corporation Ltd., regarding this offer, are final and binding and are non-contestable.
- All disputes are subject to the exclusive jurisdiction of the courts of Mumbai only.
B. M. Bansal takes over as Chairman, IndianOil
Mr. Brij Mohan Bansal, Director (Planning & Business Development) has taken charge as Chairman of Indian Oil Corporation Ltd, India’s largest commercial organization and the leading Fortune - 500 Company. He takes over the reins from Mr. Sarthak Behuria who completes his tenure on 28th February, 2010.Mr. Bansal is a B.Tech in Chemical Engineering, supplemented by D.I.I.T in Process Plant Engineering from the prestigious Indian Institute of Technology, Delhi. He has over 35 years of work experience in Oil & Gas Sector, comprising of business development, research & development, operating IndianOil’s refineries and technical services.
Mr. Bansal is Director (Planning & Business Development) and member of the Board of Indian Oil Corporation Limited (IOCL) since 2005. He is also Chairman of Green Gas Limited, a JV of IndianOil & GAIL for City Gas Business in the cities of Agra and Lucknow and IndianOil Petronas Private Ltd., a JV of IndianOil & Petroliam Nasional Berhad (Petronaws), Malaysia, for LPG import & marketing business in India.
He is the first Chairman of India Di-Methyl Ether (DME) Chapter of International DME Association (IDA), located in USA. This association is driving the adoption of DME across the world. He is also Chairman Emeritus of Bio-Diesel Association of India, a body of organizations working in the field of Bio-diesel.
Mr. Bansal has also been on the boards of Bongaigaon Refinery & Petrochemicals Ltd (now merged with IndianOil) as Director-In charge, Petronet LNG Ltd. (PLL), Engineers India Limited (EIL) and Lubrizol India Ltd (LIPL) and was Chairman of IndianOil Technology Limited. Before taking over as Director (P&BD), Mr. Bansal had a brief stint as Director (R&D) in IOCL.
As Director (P&BD), Mr. Bansal is steering IOCL towards spreading its wings in the Indian and overseas markets. The main responsibilities entail IndianOil’s diversification into gas sector, integration along Hydrocarbon Chain through Petrochemicals and Exploration & Production initiatives. He is also responsible for the company’s overseas business development efforts. He is also steering IndianOil’s renewable /nuclear energy and Bio-fuel initiatives.
Prior to joining the IndianOil Board as Director (R&D), he was heading IndianOil’s prestigious and strategically located Mathura Refinery.
Widely traveled and experienced in dealing with varied cultures and work environments in countries across the globe, Mr Bansal has been a valued resource to various professional bodies internationally.
Tuesday, February 23, 2010
IOC's under-recoveries mount, seeks govt aid
Indian Oil Corporation (IOC), the country's largest oil refiner, is hoping the government will come out with a mechanism in addition to
the proposed fuel price hike, to help the company cope with mounting losses that it incurred by selling fuel at subsidized prices.
IOC's director-finance SV Narasimhan told ET NOW that he expects the company to incur over Rs 12,000 crore of unmet under-recoveries for the current financial year as the government is yet to fully compensate oil marketing companies for the losses they made in selling LPG and Kerosene. Under-recoveries are the losses incurred by oil companies for selling fuel at subsidized prices.
" For the current year, Indian Oil's estimated under-recoveries is about Rs 26,500 crore, out of which LPG and Kerosene is Rs 19,500 crore. Out of this 19,500 crore, because petrol and diesel were compensated, we are getting 7,100 crore so far for the whole year. So that will leave about 12,000-odd crore as unmet under-recoveries," Mr Narasimhan said.
He further said, "We hope that some mechanism will be found between ministry of petroleum and finance, if the price increase (fuel price hike) does take place, after adjusting that. Because even if price increase takes place, that will be for a month and maybe for few products. So under recoveries for current year will continue in any case. So there has to be some mechanism to compensate."
Economist Kirit Parikh presented a report on fuel pricing to the petroleum minister earlier this month, where he made a case for deregulation of oil prices besides recommending an immediate hike in the price of kerosene by Rs 6 per litre and LPG by Rs 100 a cylinder. The committee pegged the losses of state-run oil marketing companies at Rs 40,000 crore because of the current subsidized price regime.
However, the Union Cabinet hasn't hiked fuel prices yet as the panel's recommendations did not cut ice with political parties- both part of the ruling UPA and the Opposition.
"There are talks everywhere about whether petrol should be de-regulated. But we do not know what will ultimately happen. Crude oil is again going up, touching $80 a barrel. So far, it's ranged from $70-$80. But we have to be prepared for the eventual increase to $90 or $100 and all. Because at that time, it may become too late to take a decision if a sudden spurt is there. So, perhaps, some of the recommendations of the Kirit Parikh panel could be implemented now because prices are in manageable limits," IOC's Narasimhan said.
However, he was non-committal about the impending fuel price hike or whether it can be expected in the Union Budget later this week.
"Fuel price hike is not decided by the company. Companies only want to see that they don't suffer because of the price revision not taking place. The government is now compensating petroleum and diesel 100%. So, whether they increase or don't increase (fuel price), that is their call and we want 100% compensation. One good thing will be if the price goes up, we will get immediate cash accruals."
On the demand front, Mr Narasimhan said that the demand is very high, with petrol growing at 15% and diesel at 8.5%. While LPG grew at 5-6%, kerosene is constant. "Growth is robust, partly because it's all subsidized. If prices go up, then at least there will be some check on the efficiency of consumption."
IOC's director-finance SV Narasimhan told ET NOW that he expects the company to incur over Rs 12,000 crore of unmet under-recoveries for the current financial year as the government is yet to fully compensate oil marketing companies for the losses they made in selling LPG and Kerosene. Under-recoveries are the losses incurred by oil companies for selling fuel at subsidized prices.
" For the current year, Indian Oil's estimated under-recoveries is about Rs 26,500 crore, out of which LPG and Kerosene is Rs 19,500 crore. Out of this 19,500 crore, because petrol and diesel were compensated, we are getting 7,100 crore so far for the whole year. So that will leave about 12,000-odd crore as unmet under-recoveries," Mr Narasimhan said.
He further said, "We hope that some mechanism will be found between ministry of petroleum and finance, if the price increase (fuel price hike) does take place, after adjusting that. Because even if price increase takes place, that will be for a month and maybe for few products. So under recoveries for current year will continue in any case. So there has to be some mechanism to compensate."
Economist Kirit Parikh presented a report on fuel pricing to the petroleum minister earlier this month, where he made a case for deregulation of oil prices besides recommending an immediate hike in the price of kerosene by Rs 6 per litre and LPG by Rs 100 a cylinder. The committee pegged the losses of state-run oil marketing companies at Rs 40,000 crore because of the current subsidized price regime.
However, the Union Cabinet hasn't hiked fuel prices yet as the panel's recommendations did not cut ice with political parties- both part of the ruling UPA and the Opposition.
"There are talks everywhere about whether petrol should be de-regulated. But we do not know what will ultimately happen. Crude oil is again going up, touching $80 a barrel. So far, it's ranged from $70-$80. But we have to be prepared for the eventual increase to $90 or $100 and all. Because at that time, it may become too late to take a decision if a sudden spurt is there. So, perhaps, some of the recommendations of the Kirit Parikh panel could be implemented now because prices are in manageable limits," IOC's Narasimhan said.
However, he was non-committal about the impending fuel price hike or whether it can be expected in the Union Budget later this week.
"Fuel price hike is not decided by the company. Companies only want to see that they don't suffer because of the price revision not taking place. The government is now compensating petroleum and diesel 100%. So, whether they increase or don't increase (fuel price), that is their call and we want 100% compensation. One good thing will be if the price goes up, we will get immediate cash accruals."
On the demand front, Mr Narasimhan said that the demand is very high, with petrol growing at 15% and diesel at 8.5%. While LPG grew at 5-6%, kerosene is constant. "Growth is robust, partly because it's all subsidized. If prices go up, then at least there will be some check on the efficiency of consumption."
Wednesday, February 17, 2010
Vehicle Tracking System from IOCL...
By this time, i guess all my dealers will be aware of Vehicle Tracking System Launched by Indian Oil Corporation Limited... Some Info about the VTS...
Name of the Project : Vehicle Tracking System
Developer : CMC Limited
Project Name : Nirdeshak
Objective : Based on its flagship solution ‘Nirdeshak, CMC implemented GPS-based Fleet Tracking System which uses SMS messaging (GSM mobile phones) for real-time data transfer between the fleets and the Central Control Station (CCS).
Benefits to Customer :
- Increase in utilisation of vehicles
- Increase in availability
- Increase in Productivity
- Fewer Customer Complaints
- Increase in Business
How to use Vehicle Tracking System by IOCL Dealers
- Visit the webiste www.indianoil.co.in or Visit http://web1.indianoil.co.in:8080/iocl/LoginNew.do
- Click on Vehicle Tracking System and this will take you to the page below
- Enter Desired Username and Password .... Remember : The username and password changes from depot to depot. For getting username and password, Please contact to your concerned Depot Manager or Sales Officer.... The username and password is same for concerned depot, hence it cannot be changed as it gives the access to all the modules uniformly to all the dealers. Click on the Login...
- Once you logged on, The VTS will have five modules...
- Masters - All the TT info will be uploaded in the Masters. Only those reports will be displayed which are included in the masters module...I guess dealers can't do anything on this...hopefully it should be done by authorized persons...
- Tracking - The name is self explanatory...but how it can be used by the dealers, still unkown for me....
- Configure VMU - Not much use for the dealers....
- Reports - This module is very useful for the dealers to track the vehicle on realtime... so i will try to explain this module in detail. Click on the Reports...the tree will get collapsed and displayed with " DYNAMIC STATUS". Click on the Dynamic Status... This will pop up new window....
In the above screen, the state office and supply location will be selected default...Remember if you log on with for example...guntakal depot UN and Password, the state office and supply location will be displayed as " Andhra Pradesh " and Guntakal Depot.
Double click on the TT Category Icon and it will display TT category with three options...
- Company Owned
- Dealer Owned
- Contractor
Select the desired Result and the result will be displayed on the screen.
Click on the icon " Transporter Name " and it will list you all the names of the transporters, who been included in the MASTERS MODULE. Select the desired one. The result will be displayed on the main screen
Click on the "TT NO" icon and it will display all the fleets concerned to the Transporters Name. Select the fleet name for which tracking to be done.
Click on the show report...the main screen of VTS will get updated ...
In the above screen TT NO, Status, Destination, speed will be shown. If you click on Vehicle number, a new window ill pop up showing all the details of Transporter. If you click on Destination, a new window will pop up showing Invoice no and product Name along with invoice generated time and date. In the position screen, the current position of the vehicle will be displayed based on GPS data. I guess there will be a GPS Lag..I mean to say that, the current position of the vehicle will not be displayed correctly. This also happens in "GOOGLE MAP". And this software is displaying current position based on the selected or well known marked points. I am not aware, how may satellilites will be tracking the fleet to determine current speed and position. If it is only one, then there will be a definite GPS LAG. It would have been much better, if it displays the current latitude and longitude position,as it can be used on google maps to determine the current location of the vehicle.
Anyway to see the fleet on the map, click the check mark below the map on the screen and this will pop up new window showing a map of india.
Improvements Needed...
- User Interface need to be upgraded
- No searching of vehicles can be made on the main screen
- Display of current location cannot be understood
- No proper display of quantity of product against to the Invoice number
- Software seems like in beta stage... needs more improvement
- Dynamic status of the vehicle on the map is not available...
Monday, January 25, 2010
Anti-lock Braking System...
I did some google search and found some of the good literature on ABS...Please download the documents from below...
1. Antilock Brakes Report:
2. ABS Trainning:
Friday, January 22, 2010
VALUATION OF PERQUISITES-PETROL EXPENSES AND MAINT CHARGES
My office is a Govt of india undertaking,having Industrial pay pattern.Accordingly our employees are being reimbursed the charges for fix quantity of Petrol and fix amount of maintenance charges per month,every employee is supposed to use his own vehicle for official work within a radius of 8 km. one side and no conveyance charges is paid to him.
Please let me know the tax treatment of this payment in light of new perquisites taxabilty provisions.?
Employee owned Vehicle ,Partly used for official & party for Personal purpose.
where Motor car/vehicle is owned by employee , in 99.99 % it is being used both for official as per as personal purposes means used exclusively for official purpose is not possible .So I assume here that the vehicle for which reimbursement of expenses has been claimed is used for official and personal purpose.further there is no difference in valuation of such perquisites ,whether vehicle is used with 8 kilometre or more.Further it is also not covered under transport allowance.(fixed 800 Pm exemption u/s 10(14)
Valuation of perquisite in Above case.
New rule has defined a standard amount, which is deemed to be the expenses attributable to official purpose out of total expense /amount reimbursement of amount for Maint. and running charges .So out of total amount reimbursed to employee such defined amount is to be reduced to get valuation of perquisites .Detail is Given as under.
If Employee owned a Motor Car
- Motor Car =<1600cc>
- Motor Car >1600CC Total expenses By employer (Petrol bill +Maint charges) minus 2400/-pm.
If Employee owned as vehicle other than motor car then perks value will be as under.
- Total expenses By employer (Petrol bill +Maint charges) minus 900/-pm.
However where employee claims that the motor-car/vehicle is used wholly and exclusively in the performance of official duty or that the actual expenses on the running and maintenance of the motor-car owned by the employee for official purposes is more than the amounts deductible (Deemed amount 1800/2400/900 as the case may be) he may claim a higher amount attributable to such official use and the value of perquisite in such a case shall be the actual amount attributable to official use of the vehicle provided that the following conditions are fulfilled:—
- the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage and the amount of expenditure incurred thereon;
- the employer gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties.
so If employee can arrange details given above then he can deduct full amount or actual amount and valuation of perks will be reduced to such amount
Example: suppose employer has paid 2000 as maint. charges per month and 3000 as petrol charges to you an you have car less than or equal to 1600 CC
- Perks will be 5000(2000+3000)-1800=3200 pm .
Suppose in above example ,you have a record of all the journey performed for official expenses and expense on such official journey is amounting to Rs 4000/- ina month
- In such case valuation will be 5000-4000=1000/pm
but your must have to prepare the records suggested above in notification .
Source : http://www.simpletaxindia.org/2010/01/valuation-of-perquisites-petrol.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+SimpleTaxIndia+(SIMPLE+TAX+INDIA)
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