Indian Oil Corp has offered a rare light diesel oil cargo in the spot market, industry sources said on 6 November.The refiner is offering 6,000 to 8,000 tonnes of the oil product for loading from Budge Budge terminal from 26 November to 28. The tender closes on November 8 and is valid until 12 November.The refinery could be offering light diesel oil due to a drop in domestic consumption, an India-based industry source said. IOC last sold light diesel oil in late October and has only sold two cargoes before that, in February and April, in 2012, the source added.A second source said IOC is probably offering the product due to maintenance at secondary units. Light diesel oil can be used as feedstock in these units, the source added.Indian Oil had planned to shut some secondary units including a fluid catalytic cracking unit (FCCU) and a hydrocracker unit in November for maintenance.IOC officials could not be immediately reached for a comment.(Reuters)
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Flashing lights on the roof, tailgating politicians' motorcades, smashing up toll booths, and beating up toll collectors.Welcome to India's network of privately run highways, where endemic toll dodging is a drag on the finances of road operators such as GVK Power and Infrastructure and Reliance Infrastructure, and a deterrent to private investment in a country where poor infrastructure shaves an estimated 2 percentage points from economic growth each year.Ambulances, fire trucks and the cars of senior government officials are among those exempted from paying tolls, but other drivers often claim a free ride, said Isaac George, GVK's chief financial officer."If an MP (member of parliament) has to be exempted, it's not just his car that is exempted. The entire entourage which follows or goes in front seeks an exemption," he said. "The government has to do something because these are all revenue leakages."India's cash-strapped government wants private companies to double their share of the cost of building roads and bridges by 2017 from about a fifth in the last five years.Eight out of every 10 road projects, however, miss revenue expectations in their first year, with the shortfall as high as 45 percent, according to a 2012 study by Fitch Ratings. The slowing economy, and sometimes inflated forecasts, are partly to blame, but toll dodging is a significant factor, said Fitch India analyst S. Nandakumar."There is obviously resistance to tolling, particularly for brownfield or greenfield toll roads which have been tolled for the first time," he said.Theft, BeatingsThe resistance to paying tolls is part of a wider pushback against India's attempt to charge for services such as electricity that have been heavily subsidised or free, and which are plagued by under-investment.Drivers use threats, violence, protests and claims of powerful connections to demand toll exemptions. Road developers lose up to a tenth of their toll revenues because of dodgers, said Vishwas Udgirkar, an infrastructure specialist at consultancy Deloitte.IRB Infrastructure Developers could not levy tolls on one road for nearly two years due to protests in the western state of Maharashtra, where Mumbai is located. Charges began on 17 October, after a court ordered the local government to provide police protection.Last month, security camera footage showed 6 men, armed with rods, assaulting staff and stealing money from a toll booth outside New Delhi. Two years ago, a toll collector was shot dead during a payment dispute at a booth near Gurgaon, where cars are charged Rs 27 (44 cents).This lawlessness comes at an economic cost.The government awarded less than a fifth of its target for new road construction contracts to private companies in the last fiscal year, official data shows. GVK and GMR Infrastructure both pulled out of road projects stalled by bureaucracy. In July, local media reported that IRB pulled out of bidding for a harbour crossing in Mumbai because of its toll collection woes in Maharashtra.In a bid to tackle toll dodging and ease congestion at toll gates, Road Transport Minister C.P. Joshi said he wants all national highways to use electronic tolls by 2014.A senior government official, however, was less concerned."I won't deny this is an issue," he said, declining to be named as he did not want to publicly speak about the issue. "We are not concerned about his (a company's) loss of revenue. He should be concerned about it."Mafias And MinionsIndia's toll roads tend to be better maintained and less congested than public routes. But unlike in Europe, for example, private roads, and not state roads, tend to become the main route between cities, leaving drivers with little choice.This breeds resentment, especially if the road is pot-holed, unsafe or snarled by mind-numbing traffic.Raju, who lives in Delhi, used to put a red flashing light on his car to pass himself off as a lawmaker to avoid tolls. He's now befriended the driver of a genuine politician and often joins his entourage when travelling in northern India."They don't provide facilities, so why should I pay a toll?" said Raju, who declined to give his full name. Highways are often congested, he said, and once, when he had a flat tyre on his way to a funeral, he waited two hours before help arrived.Waiting for government help, and attitudes to shift, could take years.K. Ramchand, managing director at road builder IL&FS Transportation Networks Ltd, said one way to manage toll dodgers was to let them have their way in the early days of the project."Most of the toll deviants are ... cars normally owned by either the local mafia, the minister or his cronies," he said. "It's safer to keep them on your side and give them a free pass.""Otherwise what happens is, these 30-40 followers come on the toll plaza, make a noise and then everybody falls into that mob mentality and then it becomes a big issue," he added. (Reuters)
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Petrol price was cut by Rs 1.15 a litre on Thursday, 31 October, the second reduction in rates in a month, while diesel prices were raised by 50 paise per litre. Jet fuel or ATF prices were cut by a steep 4.5 per cent, the first reduction in rates in six months.The price changes announced by oil companies are excluding local sales tax or VAT and will be effective midnight tonight, oil companies announced.Petrol price in Delhi will be cut by Rs 1.38 to Rs 71.02 per litre, while it will cost Rs 78.04 a litre in Mumbai as against Rs 79.49 currently.The reduction comes on back of a Rs 3.05 per litre (Rs 3.66 after including VAT) cut in rates effected from October 1.Prior to that, petrol prices had since June risen seven times, totalling Rs 10.80 per litre, excluding VAT (Rs 13.06 after including state tax) as the rupee depreciated sharply against the rupee.In a parallel move, diesel price was hiked by 50 paise, excluding VAT, in line with the January decision of the government allowing oil companies freedom to raise prices in small doses every month to wipe out mounting losses.The diesel price in Delhi has been hiked by 56 paise to Rs 53.10 per litre while it would cost Rs 60.08 in Mumbai from tomorrow as compared to Rs 59.46 currently.Today's hike is the 10th since the January 17 and most of the losses on diesel sales should have been wiped out by now to make the fuel market priced. But the fall in rupee, around 25 per cent since April, has worsened the situation and losses mounted to Rs 14.50 per litre.However, the recent firming of rupee against US dollar and monthly increases have trimmed these losses to Rs 9.58. Diesel rates have risen by a cumulative Rs 5.95 this year."Prices of petrol were last revised downwards on October 1 by Rs 3.05 per litre (excluding state taxes) on account of softening of prices in international markets as well as strengthening of the rupee."Since last price change, international prices of petrol have declined marginally from about USD 113 per barrel to about USD 112. The Rupee-USD exchange rate has appreciated from around Rs 63 to a US dollar to around Rs 62. Both these factors have resulted into a reduction in prices of petrol," Indian Oil Corp, the nation's largest fuel retailer, said in a statement.IOC said exercising the January authorisation to increase the diesel prices within a small range every month, retail prices are being revised every month and today rates have been hiked by 50 paise per litre."Even after the current increase, under recovery (revenue loss) on retail diesel shall stand at Rs 9.58 per litre," it said.Besides diesel, oil firms are losing Rs 35.77 per litre on sale of PDS kerosene and Rs 482.50 per 14.2-kg domestic cooking gas (LPG). These are lower than Rs 38.32 and Rs 532.50 loss incurred last month.At current rates, IOC projected a revenue loss of Rs 71,200 crore on sale of diesel, domestic LPG and kerosene for the full 2013-14 fiscal. The industry (IOC plus other state fuel retailers HPCL and BPCL) are projected to incur an under recovery of Rs 135,900 crore."The movement of prices in international oil market and Rupee-USD exchange rate is being closely monitored and developing trends of the market will be reflected in future price changes," the statement added.Alongside, oil firms also cut rates of non-subsidised domestic cooking gas (LPG) that households buy after exhausting their quota of 9 subsidised or cheaper cylinders.Price in Delhi was reduced by Rs 49.50 per 14.2-kg bottle to Rs 954.50.This reduction comes on back of Rs 71.50 per cylinder hike to Rs 1,004 effected from October 1.Non-subsidised LPG in Mumbai will cost Rs 969 from tomorrow as compared to Rs 1,021 currently.Jet Fuel Prices Cut 4.5%Jet fuel or ATF prices were today cut by a steep 4.5 per cent, the first reduction in rates in six months.ATF prices had touched a life time high of Rs 77,089.42 per kilolitre (kl) following five consecutive increases since June as rupee depreciated against the US dollar, making oil imports costlier.However, the rupee's appreciating during last month helped trim imported cost, leading to cut in prices.Aviation Turbine Fuel, or ATF, price at Delhi was cut by Rs 3,482.16 per kl, or 4.5 per cent, to Rs 73,607.26 per kl, according to Indian Oil Corp, the nation's largest fuel retailer.Rupee appreciation against US dollar also led to two rounds of reduction in petrol rates in one month - Rs 3.05 a litre from October 1 and Rs 1.15 announced today.Since June, ATF prices have gone up by a record Rs 14,439.45 or 23 per cent in five instalments.In Mumbai, jet fuel will cost Rs 76,035.89 per kl from tomorrow as against Rs 79,716.05 per kl currently.Rates at different airports vary because of difference in local sales tax or VAT.Jet fuel constitutes over 40 per cent of an airline's operating costs and the price cut will help bring down the fuel cost of the cash-strapped carriers.No immediate comments were available from the airlines on the impact of the price reduction on passenger fares.The three fuel retailers -- IOC, Hindustan Petroleum and Bharat Petroleum -- revise jet fuel prices on the 1st of every month, based on the average international price in the preceding month.(PTI)
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DLF, India's top real estate developer, posted a 27 per cent fall in its consolidated net profit for the July-September quarter, hit by slowing home sales in Asia's third-largest economy."In the current economic and high interest rate environment, the company expects a slow absorption of product in the market," DLF said in a statement to the exchange.The New Delhi-based developer, founded by billionaire K.P. Singh, said net profit for he fiscal second quarter was Rs 100 crore compared with Rs 138 crore a year earlier. The profit fell short of analyst expectations of Rs 140 crore, according to Thomson Reuters I/B/E/S. Total revenue was Rs 1,956 crore, down from Rs 2,040 crore posted during the same period last year.On 30 October, Oberoi Realty, India's second-largest developer by market value, posted a 48 per cent fall in net profit for the September quarter - its worst quarterly profit decline in nearly two years - hit by a drop in sales.(Reuters)
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India will ask Reliance Industries Ltd to relinquish 80 per cent of its east coast deepwater D6 gas block, including five discoveries, as the energy major has not adhered to timelines for developing the area, the oil secretary said."We are waiting for the oil minister's final order," Vivek Rae told Reuters on Tuesday, referring to the instruction telling Reliance to relinquish the discoveries in the 7,645 square kilometre D6 block.The five discoveries within D6 are D4, D7, D8, D16 and D23. Rae said Reliance failed to submit reports on the commercial viability the five discoveries on time.He said the relinquished area will be auctioned in subsequent licensing rounds. The relinquished area does not contain any producing fields.Total reserves in these five discoveries in the Krishna Godavari basin are estimated to be 805 billion cubic feet, two sources with direct knowledge of the matter said. The sources declined to be named due to the sensitivity of the issue.No decision has yet been taken on the fate of the remaining three fields in the D6 block -- D29, D30 and D31 -- which are estimated to hold about 350 billion cubic feet of gas reserves, Rae said.He said Reliance had submitted commerciality declarations of the three discoveries on time but had not carried out the necessary tests.A Reliance Industries spokesman declined to comment.Natural gas output from the Krishna Godavari basin's D6 block, in which BP <BP.L> has a 30 percent equity stake, has declined to 14 million cubic metres per day (mmscmd) from 60 mmscmd at the end of 2010.The companies have cited geological complexities for the fall in output, which has been in steady decline since 2010, while the oil regulator believes they failed to drill enough wells.(Reuters)
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India's biggest gas pipeline operator GAIL (India) has delayed construction of new pipelines as an economic slowdown has crimped demand for costly imports and domestic supplies are shrinking.The delay will mean GAIL cuts capital expenditure nearly by 30 per cent in 2014/15 to Rs 3,600 crorefrom the current fiscal year ending on March 31, 2014 and will also impact revenue."Overall economic sentiments are down, their (user industries') margins must be under pressure ... when the economy is down everybody feels the heat," Chairman B. C. Tripathi said.Economic growth in India, the world's fourth-largest energy consumer, languished near its slowest in three years at 5.5 per cent in the quarter that ended in June and industrial output in August slowed to 0.6 per cent.GAIL now cannot find clients for gas even at about $15 mmBtu, down from previous sales at $20 per mmBtu, because of the economic slowdown, Tripathi told a news conference.That, combined with shrinking domestic supplies, has forced the state-run company to delay by one to two years plans to lay 4,000 kilometres of pipeline, Tripathi said."We are saying that we will build pipelines in synchronisation of supply of gas," he said, adding GAIL will still build branches to main pipelines to help transmit gas to user industries where required.India's local gas output declined by an annual 14.1 per cent in April-September, as production from a block operated by Reliance Industries fell to 14 million cubic metres from 60 mmcmd in 2010.At the same time, liquefied natural gas (LNG) is expensive in Asia, costing about $17 per million British thermal units (mmBtu). In the United States, a boom in shale oil and gas has pushed down prices to below $4 mmBtu.GAIL, which own 11,000 kilometres of pipeline network, is currently transmitting gas at a rate 100 million cubic metres a day (mmscmd) compared to a capacity of 210 mmscmd as supplies from Reliance's D6 block have almost dried up, Tripathi said.A lack of pipelines has already forced Petronet LNG, India's biggest LNG importer, to cut capacity use at a 5 million tonne a year terminal in southern India.(Reuters)
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India's state-owned oil company ONGC is interested in exploring for oil and gas in the Arctic offshore with Russian partners, leaders of the two countries said after holding talks in Moscow on Monday, 21 October. The two sides will study the possibility of pumping Russian hydrocarbons by pipeline to India, while agreeing on the significance of supplying Russian liquefied natural gas (LNG) to India. A joint statement, issued after President Vladimir Putin hosted Prime Minister Manmohan Singh in the Kremlin, contained no energy breakthroughs. India has long sought to expand its upstream foothold in Russia, with little success. ONGC's overseas arm is a partner in the Sakhalin-1 oil and gas project, which is operated by a unit of Exxon Mobil State oil major Rosneft, another Sakhalin-1 partner, is lobbying for the right to export LNG to Asia-Pacific buyers. Rosneft and Exxon have announced plans to build a $15 billion LNG plant to process Sakhalin-1 gas, to be launched in 2018 with an initial capacity of 5 million tonnes per year. Russia estimates its offshore oil resources at 100 billion tonnes, which would be enough to satisfy global demand for 25 years at current levels of consumption. Rosneft already has agreements with ExxonMobil, Eni and Statoil to explore for Arctic deposits. These projects are unlikely to produce any oil or gas before the 2020s.(Reuters)
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Shares in Hindalco Industries gain as much as 3 per cent after Prime Minister Manmohan Singh's office says he is satisfied with the outcome of the process of allocating coal blocks to certain companies, dealers say.The comments were the first attributed to Singh since a case was filed this week against three companies in a scandal, dubbed "Coalgate." The scandal surfaced after an auditor's report last year questioning the government's practice of awarding coal mining concessions to companies without competitive bidding.Hindalco said last week it was being investigated in a coal block allocation case and it followed every process required in the coal block allocation.Read more about 'Coalgate' here(Reuters)
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