Fuel price hike draws closer


HT Correspondent, Hindustan Times…New Delhi, May 08, 2012



There seems to be no further escape for the consumers of auto and cooking fuels. An across-the-board hike in the prices of petrol, diesel and cooking gas seems to be just round the corner. The only good news is that to reduce the burden of this fuel price hike on the consumers - necessitated in the wake of high global oil prices and growing losses of state-owned oil companies - the Centre has asked state governments to pitch in and reduce taxes on fuel in the manner done in Goa recently.

Sending out a strong message to all political parties including United Progressive Alliance (UPA) allies and the opposition, finance minister Pranab Mukherjee made it clear on Tuesday that the Central government alone cannot address the burgeoning fuel subsidy.Replying to the debate on the Finance Bill, Mukherjee hinted that the time has come for all parties to bite the bullet and share the burden."Coalition consensus is necessary for reforms and all stake holders should come together for development," he said. States need to cut ad valorem taxes on fuels, the minister said. BJP-ruled Goa is the first state to have done so on its own. The companies reacted with scepticism. "We have been hearing this intention of the government for a long time," said a senior official at Indian Oil Corporation. "We are awaiting concrete action on states pitching in by reducing taxes."

Mukherjee hinted that oil imports will become difficult if crude touches $150 per barrel. The government controls the prices of diesel, domestic LPG and kerosene. Oil companies lose Rs. 14 a litre on diesel, Rs. 32.59 per litre on kerosene and Rs. 480 per cylinder of LPG.

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The diesel pricing dilemma


(Courtesy: The Hindu Business Line , New Delhi, May 07, 2012)



Everyone knows it is heavily subsidised. Yet, any talk of a price increase in diesel raises the hackles of political parties. And amidst this chaos, expensive cars and SUVs are making the most of a hugely cheap fuel.



Oil companies are losing Rs 15/litre on diesel and are terribly concerned because it is already accounting for over 50 per cent of their projected losses of over Rs 2,00,000 crore this fiscal. Kerosene and cooking gas take up the balance but diesel continues to be the biggest area of concern because its use extends to a host of applications.



The transport sector is only a part of the actual problem. Thanks to the severe power crisis in many States, generator sets have become inevitable and need to be powered by diesel. Furnace oil, used in a variety of industrial applications, has given way to diesel which is a less expensive option.

 http://www.thehindubusinessline.com/industry-and-economy/article3390890.ece?ref=wl_opinion

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NOC, IndianOil seal new fuel supply


(Courtesy: The Kathmandu Post, Nepal, April 30, 2012)



The Nepal Oil Corporation (NOC) and IndianOil on Friday signed a new petroleum supply agreement.



As per the new pact that will be effective until March 31, 2017, the IndianOil will be the sole exporter of refined petroleum products to Nepal for the next five years.



NOC acting Managing Director Suresh Kumar Agrawal and IndianOil General Manager (commercial) R Karandikar signed the bi-lateral pact.



According to NOC, the agreement has scrapped the existing price adjustment factor (PAF), under which IndianOil had been charging 5 percent on LPG, diesel and petrol and 2.5 percent on other petroleum products.

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HPCL set to revive Vizag project, applies for land


(Courtesy: DNA, Mumbai, April 27, 2012)



Hindustan Petroleum Corporation Ltd (HPCL) is set to revive its plan to set up an integrated mega refinery near Visakhapatnam.



The company has approached the Andhra Pradesh government for allotment of about 1,500 acres at Achyutapuram near Vizag for this.



The land the state-owned company is keen on falls under a special economic zone and the state is yet to take a final decision on that.



According to state government sources, HPCL is keen on setting up a mega refinery, an aromatic plant and a naphtha unit in its proposed project with an estimated outlay of Rs 35,000 crore. The refiner had come up with a similar proposal in 2006 and was allotted the required land by the government. However, it had deferred its plan and the land was also taken back by the government.

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IndianOil offers support to Sri Lanka refinery


(Courtesy: The Hindu, New Delhi, April 27, 2012)



The Lanka IndianOil has stepped in to offer support to Sri Lanka at a critical juncture: its only refinery, Sapugaskanda, can only process Iranian crude efficiently. With U.S. sanctions looming, the refinery needs to be urgently revamped to function with better efficiency.



The Lanka IndianOil, a wholly owned subsidiary of IndianOil, which has a one-third market share in the retail trade in Sri Lanka, has offered to help in the US $ 2 billion upgrade of the refinery. Earlier attempts at modernisation of technological facilities with the help of other countries have not worked: the investments were huge, and only part of it was available as loan from those interested in refurbishing the refinery.



“We have offered them our expertise,” said Lanka IndianOil Managing Director, Suresh Kumar, when asked if IndianOil was interested in helping out Sri Lanka. A technical team from IndianOil had visited the facility and, this had made political parties such as the JVP, protest the idea that Indian help would be sought for the project.



Sri Lanka consumes about 5 million tonnes of petroleum products annually. Only about 2 million tonnes is refined in Sapugaskanda. The remaining is imported as petrol, and diesel, leading to a massive drain in foreign exchange.

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