Buildup of Petrol at Delhi effective 24-05-12
The following Elements are considered: C&F (Cost & Freight) Price of Gasoline (Petrol) BS III equivalent, Average Rs/$ Exchange rate, Refinery Transfer Price (RTP) on landed cost basis for BS IV Petrol, Price Charged to Dealers (excluding Excise Duty and VAT), Specific Excise Duty, Dealer Commission, VAT and Retail Selling Price,
The competition in commercial/industrial LPG (liquefied petroleum gas) segments is set to intensify with Indian Oil Corporation (IOC) planning to appoint over 100 distributors to cater exclusively to such customers. Aimed at improving the oil company's market share and profitability, the move assumes significance for it is not only expected to give both public and private LPG marketers, but also existing Indane distributors, who deal in commercial cylinders, competition. Though both BPCL and HPCL have exclusive distributors for commercial cylinders, the numbers are small, sources in oil industry said. Unlike the subsidized domestic (14.2 kg) cylinders, commercial cylinders, in capacities of 5 kg, 19 kg and 47.5 kg, are free market product. Their pricing is linked to import parity price and revised on a monthly basis.
An IOC official said 114 locations for the NDNE (non-domestic non-exempt) distributorships have been identified based on market potential. Technically, there is no restriction on the area of operation for the existing distributors with regard to commercial cylinder sales. The exclusive NDNE distribution network would be helpful when subsidy on domestic LPG is reduced. “When the price gap narrows, households may opt for commercial LPG,” an IOC official said. The government is said to be considering imposing a cap on the number of subsidized cylinders per household in a year. Sources in IOC said the share of commercial cylinders in the total packed (cylinder) sales is about 7.2 per cent. For IOC, the share of the commercial cylinders in its total sale of packed LPG is around 5.7 per cent. The market size of packed LPG, of the public sector oil companies, is 10.68 lakh tonnes. IOC's share is 4.05 lakh tonnes or about 38 per cent. Six of the 114 NDNE distributors have been commissioned — three in Maharashtra, two in West Bengal and one in Gujarat. Letters of intent have been issued for 44.
The existing 5,000 Indane distributors, sources added, were engrossed in distribution of cylinders to domestic segment, which forms 90 per cent of their total business volume and as such not able to focus on the commercial cylinders to the extent required. The NDNE distributors could be individuals, partners of partnership firms and both public and private limited companies having relevant experience and meeting the selection criteria. The NDNE distributorships, which are expected to help curb/reduce illegal diversion of domestic LPG to commercial/industrial segments, would not be allowed to enroll domestic customers. The existing domestic LPG distributors, however, shall continue to sell domestic and commercial cylinders in the same market. Sources among Indane distributors said commercial cylinder sales were highly competitive and success depended on the ability of the agents to give discounts and credit to the consumers.
Credit :….N. Ravi Kumar ….from the pages of THE HINDU newspaper.
Rangarajan team to review oil firm-govt contracts
The government on Wednesday announced constitution of a committee under C Rangarajan, chairman, PM’s Economic Advisory Council, to review the existing production sharing contracts signed between the oil and gas companies and the government for developing exploration blocks. “The committee will review the existing PSCs, including in respect of the current profit-sharing mechanism... and recommend necessary modification for the future PSCs,” said an official statement.
Officials said the committee has been constituted after intervention of the Prime Minister’s Office (PMO), following increasing disputes between the developers of the oil and gas blocks and the government. The Committee has been asked to submit its report by August 31.The trigger for this review is clearly seen as the ongoing spat between Mukesh Ambani-led Reliance Industries Ltd (RIL) and the oil ministry over declining gas production and the cost recovery from the block.RIL has already dragged the government into arbitration for disallowing a recovery of $1 billion (R5,500 crore) from the producing KG-D6 gas field. Besides, RIL has also sought an increase in the price of gas that is being produced from the KG-D6 field from the existing government fixed price of $4.2 a unit.
The petroleum ministry has recently issued a R5,500 crore penalty notice to the company earlier this month for not fulfilling obligations and failing repeatedly to meet targets, factors, which it said caused considerable losses to the government. Besides, the Committee shall also be exploring various contract models with a view to minimise expenditure monitoring of the contractor without compromising, firstly, on the hydrocarbons output across time and secondly, on the government’s take. The Committe would be “a suitable mechanism for managing the contract implementation of PSCs,” the statement said.“Suitable governmental mechanisms to monitor and to audit Government of India (GOI) share of profit petroleum,” have been listed as another term for the Committee.
…from the pages …Hindustan Times…New Delhi, May 30, 2012
After the hike petrol price in Mumbai Rs. 78.57
After the hike petrol price in Delhi Rs. 73.18
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