Domestic natural gas prices cut almost 20%
Domestic natural gas prices will be almost 20 per cent cheaper in the April-September 2016 period. The price for the period will be $3.06 per million British thermal unit on a gross calorific value basis. The government also announced the price cap of $ 6.61 per mBtu on a gross calorific value basis for natural gas from deepwater, ultra deepwater and high temperature high pressure areas. Earlier in March, the government approved pricing and marketing freedom for natural gas produced from such difficult areas. However, the pricing freedom is subject to a price cap which is determined by the lowest among landed cost of imported fuel oil, weighted average of imported fuel oil, imported coal and imported LNG or the landed cost of imported LNG. The price ceiling will be applicable from April-September 2016 before it is revised again. The domestic natural gas price is as per a formula approved by the government in September 2014 In the September 2015-March 2016 period the price of domestic natural gas was $3.82 per mBtu on a gross calorific value basis.
GSPC interest payout 10 times the revenues: CAG
Even as the country is infuriated with the big-ticket defaulters pushing the banks to the brink, it is the Gujarat government-run Gujarat State Petroleum Corporation Ltd (GSPC), that has now assumed a dubious distinction of becoming an iconic PSU, burdened with heavy debt and interest payouts being more than ten-times its revenues from oil & gas production. The latest Comptroller and Auditor General of India (CAG) report on GSPC, revealed that the company had failed to address “properly the risks associated with cost, technology and price in development of the Krishna-Godavari (KG) Block. The Field Development Plan for DDW field did not take into account the fact that the project was not viable at the government-approved gas prices prevalent at that time..” This, according to CAG, resulted in uncertainty regarding the future prospects in the block where the company has invested around Rs 195.76 billion. CAG report found that GSPC’s total borrowings rose by 177 per cent during 2011-15 from Rs 71.2667 billion to Rs 197. 1627 billion, mainly due to development activities in KG block. The interest payout increased substantially from Rs 9.8171 billion in 2011-12 to Rs 18.0406 billion in 2014-15. While company’s revenues from production fell from Rs 2.3030 billion in 2011-12 to Rs 1.5251 billion in 2014-15 mainly due to lower oil prices and fall in gas production from 119.24 million cubic metres to 50.21 million cubic metres. Company’s Hazira block has been the main producing block with more than 70 per cent contribution to total gas output. “GSPC has been a centre of corruption. Even after wasting huge money, GSPC has zero commercial production from KG Basin. When Narendra Modi was chief minister in Gujarat, he made tall claims of 20 TCF gas find in KG Basin. In reality, there wasn’t even 2 TCF which was recoverable. People are being misguided. Also, the CAG report has noted that GSPC had surrendered 11 blocks overseas and written off about Rs 17.34 billion. Whose loss is it ultimately?” Congress leader and National Spokesperson, Shaktisinh Gohil told BusinessLine. The apex audit body also noted that GSPC did not exercise its right to conduct audit of its JV accounts, which had outstanding dues of Rs 23.2952 billion. In November 2009, GSPC’s Management Committee had approved the FDP for Deen Dayal West (DDW) area with commercial production estimated in December 2011. But the trial production could be taken up only in August 2014 and the commercial production is yet to be started. While submission of FDP, GSPC had assumed gas price of $5.7 per million British thermal unit (mmBtu), but the Central government-approved formula put the gas price at $4.2 per mmBtu. Wrong estimation has escalated the costs. Against the FDP estimates of $547 million, the tender cost for offshore facilities rose to $810 million. But the actual cost stood at $1,058 million.
Additional levy of upto Rs 120 at Mumbai airport from April 1
Flying out of the Chhatrapati Shivaji International Airport here is set to get costlier with an additional levy of up to Rs 120, to fund the metro rail connectivity to the aerodrome, coming into effect from Friday. Tariff regulator Airports Economic Regulatory Authority (AERA) had in January this year allowed Mumbai International Airport Limited (MIAL) to charge an additional levy of Rs 20 from each domestic flier and Rs 120 from each international traveller as development fee to fund a metro rail project. The additional levy would be applicable from April 1, 2016 and remain in force till March 31, 2021, AERA had said in its order. MIAL is a 26:74 joint venture between the GVK group led consortium and the Airports Authority of India. The private airport operator currently levies a development fee of Rs 600 from an international passenger and Rs 100 from a domestic traveller. MIAL had last year sought AERA’s permission to charge additional development fee, to fund the metro rail project. Mumbai Metro Rail Corporation (MMRC), the project implementing company for all metro rail corridors across the western metropolis, is to construct a 32.5-km underground line, connecting Colaba in South Mumbai to SEEPZ in western Andheri suburb.
Chandigarh airport to be named after Bhagat Singh; Haryana Assembly gives green signal
The Haryana Assembly on Thursday unanimously passed a resolution to name Chandigarh airport after freedom struggle icon Shaheed Bhagat Singh. As soon as the Question Hour ended, Parliamentary Affairs Minister Ram Bilas Sharma moved the resolution in this regard. Later, it was unanimously passed with ruling BJP and main opposition Indian National Lok Dal (INLD) MLAs supporting it. Opposition Congress MLAs were not present as they have not been attending the assembly session to protest the six-month suspension of their three MLAs for tearing copies of the Governor’s address. On the resolution passed on Thursday, Sharma told the House that the state government would soon write to the Union Civil Aviation ministry in this regard.
Flying in and out of Mumbai to get costlier due to scarcity of landing slots
Flying in and out of Mumbai is set to get expensive, because the city’s airport has run out of landing slots, threatening to create a demand-supply mismatch soon with the nation’s airline passenger traffic growing at 20 per cent annually. The Mumbai airport hasn’t allowed addition of any new flights from the summer schedule that began this month, airline executives said. This at a time when carriers announced an 18.6 per cent increase in flights on domestic routes during the summer schedule. With airlines following dynamic pricing, not enough services to meet passenger traffic in Mumbai could drive up the cost of air travel to India’s commercial capital. “Failure to add capacity from the Mumbai airport, which is India’s second largest airport, can badly impact the growth of the sector,” said asenior airline executive, who didn’t want to be named.
Karnataka to rebuild Kalaburgi greenfield Airport
The State government will soon take up the task of completing the much-delayed Kalaburagi green-field airport project. Replying to a debate on the state budget, Siddaramaiah said new tenders will be floated soon to take up the work on the project which has remained suspended for over 3 years now. The CM renewed promise came in the backdrop of his meeting with leader of the Congress in the Lok Sabha M Mallikarjun Kharge who sought more funds from the state government for projects in Hyderabad-Karnataka region. Soon after the meeting, Kharge had supported Siddaramaiah’s decision to set up the Anti-Corruption Bureau (ACB) recently. Siddaramaiah also announced take up two other projects including the development of railway line
Aviation flying high with domestic air traffic growth over 20%
The recent data presented by Directorate General of Civil Aviation ( DGCA) shows that February is the fifth consecutive month where domestic passenger traffic grew over 20% on a year-on-year basis. In February, Indian airlines flew 7.4 million passengers as against 6 million passengers in the corresponding month of the last year, indicating a jump of 24.7%. The firm trend in traffic and lower fuel prices are expected to support valuation of aviation stocks in the short and medium term. There are a few factors which have contributed to the growth in passenger traffic. First, airlines have been passing on the benefit of lower crude oil prices to travellers. Second, as rail fares have increased in the recent months, the difference in fares of rail and airlines has narrowed for key routes such as Mumbai-Delhi, Mumbai-Bengaluru, and Mumbai-Chennai. It has been observed that the difference between the fares of rail (AC 2-tier) and air is in the range of Rs 700-800 on these key routes. Due to this, there has been a meaningful migration of travellers from rail to air.