The fuel price hike saw the government on Friday coming under fire from ally Trinamool Congress and political rivals BJP and Left parties which decided to hit the streets on the issue while AIADMK demanded an immediate rollback of the increase.West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee opposed the hike in fuel prices, saying it will put the common man in great difficulty."We do not support the repeated rise in fuel prices. This will put the common man in great difficulty. We have conveyed our view where it needs to be conveyed," Banerjee, whose Trinamool Congress is a key UPA ally, said in Kolkata.Pointing out that fuel prices were already high, she said "kerosene and domestic gas are used by common people.The price of petrol was also recently hiked."Describing the hike in diesel and LPG prices as an "inhuman step", BJP spokesperson Nirmala Sitharaman said "the increase will also affect India's growth story" the party would hold protest demonstrations tomorrow across the country."BJP President Nitin Gadkari has announced that the party will hold protests from the district to the national level across the country against the hike," BJP vice-president Mukhtar Abbas Naqvi told PTI.He said the hike has been announced by the government to "serve the interest of the oil mafia"."In the last one year, the government has increased petroleum prices ten times. While the common man is bearing the brunt of price rise, the government has now added fuel to fire," Naqvi said. BJP also dared the UPA allies opposing this price hike to come clear on their stand and leave the alliance in support of the common man, instead of doing mere lip service."The step to increase the LPG and diesel prices is an inhuman step, considering that this government has not taken any measures to contain food inflation", said Sitharaman.She said the hike in diesel and LPG prices will have a cascading effect on inflation.CPIM) said Left parties will organise nationwide protests against the "completely unacceptable" hike in prices of diesel, kerosene and cooking gas.CPI(M) Polit Bureau member Sitaram Yechury said the sops announced in terms of reduction in duties were not sufficient.Tamil Nadu Chief Minister Jayalalithaa described as "unacceptable" the fuel price hike and demanded its immediate rollback."The price of LPG, which is being used by all strata of people has been increased by Rs 50. People cannot tolerate this. Further, the price of kerosene has also been increased by Rs 2. This will severely affect the poor people as they are the main consumers of kerosene" Jayalalithaa said in a statement in Chennai.On the increase in diesel price by Rs 3 a litre, she said it would have a cascading effect on the prices of most commodities, including vegetables, as they are transported by road."When there is an overall rise in prices, this hike in fuel prices would severely affect the people. I, therefore, would like to insist that the Centre should immediately roll back the hike in prices of diesel, kerosene and LPG," she said.(PTI)
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The cabinet on Thursday steered clear of discussing Vedanta Resources' plan to buy British oil explorer Cairn Energy's Indian assets, further delaying what could be one of the largest deals in the Indian oil and gas sector."It did not come up today," Oil Minister S. Jaipal Reddy told reporters after the weekly cabinet meeting in New Delhi. Reddy had earlier said the cabinet would review the deal this week or next.Last month, an Indian ministerial panel said it would refer the deal back to the cabinet, but did not disclose its recommendation, which it said was "unanimous."A government source told Reuters the panel would recommend that the operators of Cairn Energy's key Indian oil field share the royalty burden in proportion to their stake in the project, a proposal that could derail the deal.Cairn Energy agreed last August to sell a majority stake in Cairn India to Vedanta in a deal worth up to $9.6 billion but the it has been held up over issues with ONGC, which has a 30-percent holding in the Cairn-operated fields in western India, but pays 100 percent of the royalties.India's oil ministry has been pushing to share the royalty burden between ONGC and Cairn India, a move opposed by both Cairn and Vedanta. Any change in the royalty structure would impact valuations and could jeopardise the deal, analysts have said.Vedanta has already acquired 8.1 percent through an open offer to Cairn India's minority shareholders, and snapped up another 10.4 percent from Malaysia's Petronas.It has also raised $1.65 billion through a private bond offering to help pay for the planned acquisition.Earlier on Thursday, Cairn Energy said it would replace its current chief executive officer Bill Gammell and announced a sweeping board shake-up.(Reuters)
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State-run gas firm GAIL (India) and explorer Oil and Natural Gas Corp are interested in buying part of ExxonMobil Corp's stake in Kazakhstan's Kashagan oil field, GAIL Chairman B. C. Tripathi said on Wednesday."We are interested. In all such ventures abroad we are happy to work with OVL (ONGC Videsh Ltd)," Tripathi told Reuters, when asked to comment on a news report that the two Indian firms are eyeing part of Exxon's stake in the giant Kashagan oil field.Tripathi refused to elaborate further.The Hindustan Times newspaper on Wednesday reported that ONGC Videsh Ltd -- the overseas investment arm of ONGC -- and GAIL are planning to acquire an 8.4 per cent stake from Exxon in the Kashagan field for about $5 billion.The consortium led by ONGC Videsh has submitted a "non-binding but firm indicative bid" to Exxon for half of its 16.81 percent stake in the Kashagan oil field, the report said, citing documents related to the deal.ExxonMobil has never publicly stated its intention to sell any of its stake.(Reuters)
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With global crude oil prices climbing to their highest level in two-and-a-half years, Oil Minister S Jaipal Reddy Friday said a ministerial panel will take a call on raising petrol and diesel prices. "There is volatility in the international market. I wish to take the matter to the Empowered Group of Ministers (EGoM) after the Budget is presented," he told reporters here. International crude oil prices have topped $110 per barrel, widening the gap between the domestic retail selling price and cost of production. "Finance Minister Pranab Mukherjee, who heads the EGoM, is at present busy with Budget. The matter will be considered by EGoM whenever he gives time (for the meeting)," he said. The Petroleum Ministry is pinning hopes on customs and excise duty cut in the Union Budget to avoid hiking petrol and diesel prices. Petrol, whose pricing was freed from government control in June last year, is being sold at a discount of Rs 2.25 per litre to its imported cost. On diesel, state-owned Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum lose Rs 10.74 a litre. Besides, they lose Rs 21.60 per litre on kerosene and Rs 356.07 per 14.2-kg domestic LPG cylinder. The three firms are currently losing Rs 430 crore per day and at current rates are projected to end the fiscal with Rs 76,559 crore revenue loss. "Strictly speaking, companies can increase price (of petrol) but it in view of the volatility in the international market, it is good for everyone to wait for EGoM to decide," Reddy said indicating that the state-run oil firms would not raise rates unilaterally. The ministry is hoping Finance Minister Pranab Mukherjee in his Budget for 2010-11, to be presented on Monday, will abolish customs duty on crude oil and cut excise on petrol and diesel to avoid a further increase in retail prices. It wants customs or import duty on crude oil to be reduced to zero from 5 per cent at present. Also it wants the customs duty on diesel slashed to 2.5 per cent from 7.5 per cent at present, along with a reduction in the specific excise duty imposed on the most-consumed fuel in the country. "Eliminating customs duty on crude and correspondingly bringing down duty on finished products would reduce the under-recoveries (revenue loss on selling fuel below cost) that are compensated by the government," an official said. The oil ministry is also hoping that Mukherjee would reduce specific excise duty of Rs 2.60 per litre on diesel and Rs 12.35 a litre basic and additional excise duty on petrol.
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Four new windmills made by Gamesa Tecnologica whirl beside a banana grove in Kammalapatti, Tamil Nadu, driven by a breeze that is too soft to spin a group of older turbines standing idle nearby. The Spanish manufacturer replaced 10 older machines at the wind farm, gaining a toehold in India which has 4,600 wind turbines more than a decade old, many rusty or too small for today's power market.Europe's wind-turbine makers are stepping up sales in India, anticipating a boom in one of the bigger "repowering" plays that Gamesa says may be worth $3.8 billion in sales. The challenge is in taking work from Suzlon Energy and in getting funds in a market still depressed by the financial crisis. "Many good-quality wind sites have relatively old and inefficient turbines," says Amit Kansal, vice-president of sales for the Indian unit of Denmark's Vestas Wind Systems, the world's largest wind-turbine maker. "The opportunity for repowering is obvious."The 4,600 turbines have a capacity of 1.3 gigawatts, or about 9 per cent of the installed base in India, which rocketed to become the fifth-biggest wind market by offering tax credits to operators regardless of productivity. India also has the smallest average turbine size of the world's top 10 markets, according to Kenersys GmbH, a German manufacturer.Gamesa's estimate of Rs 16,800 crore ($3.8 billion) sales potential assumes 3,000 MW of installed capacity in need of replacement.All three turbine makers have lost money for shareholders over the past 12 months and are looking for new markets — Suzlon has dropped about 21 per cent in the period, Gamesa 28 per cent and Vestas has fallen 47 per cent.In India, repowering a site costs 20 per cent less than setting up a new project and no new land permits are needed, says J. Balakrishnan, a Gamesa sales manager working on a repowering project there.The smaller turbines installed in India are less efficient, require higher wind speeds and generate less power than newer models. The Indian government, too, is prodding the industry toward modernisation.Many existing wind farms in India were built to take advantage of a tax break. The measure encouraged companies to erect turbines but not to maintain them or see that they produced power, according to Renewable Energy Minister Farooq Abdullah. He wants the tax credit to be replaced by an alternative subsidy that rewards projects for the amount of energy they generate. The so-called generation-based incentive pays wind farms Rs 500 a MW-hour of electricity they feed to the grid.Still, many operators may not want to junk equipment for wind farms that has more than half its useful life left.Gamesa, which completed India's first repowering project last month, thinks installations in Spain and other European countries can be revamped too, CEO Jorge Calvet said in an interview last month in Mumbai. Kenersys, the German manufacturer, and Orient Green Power, an Indian developer of renewable-energy projects, say they are looking for ways to tap into the budding repowering market.The newer machines — with hub heights and rotor diameters more than double that of the older ones — better harvest energy from the wind. The new machines may double the farm's electricity output by the end of the monsoon season in October, helping the project pay off in five years, Gamesa estimates. Other benefits include lower maintenance costs and easier access to replacement.Older machines can use more power than they produce during low-wind seasons. Owners turn them off, sometimes for up to half the year. Obstacles to repower old sites include getting up to a dozen owners of each facility to agree and ensuring the plant can earn the same subsidised rate for energy. The waste generated by tearing down old windmills is another barrier.Bloomberg(This story was published in Businessworld Issue Dated 09-05-2011)
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