Saudis Arabia raises oil pricing for Asia by most since April last year
Saudi Arabia raised its pricing for June oil sales to Asia by the most since April 2015, a sign that the world’s biggest crude exporter expects demand to recover as the global market rebalances. State-owned Saudi Arabian Oil Co. increased its official selling price for Arab Light crude to Asia by $1.10 a barrel to 25 cents more than regional benchmarks Oman and Dubai, according to a statement. The company, known as Saudi Aramco, was predicted to raise the grade by 65 cents a barrel, according to the median estimate in a Bloomberg survey of five refiners and traders. The Middle East producer is boosting the cost of its oil to the largest consuming region as unplanned supply outages and disruptions help to curb a global glut and signs of higher demand emerge. Benchmark prices have rallied more than 60% since mid-February, rebounding from the biggest crash in a generation on expectation that the surplus will shrink as US production declines. Arab Light’s price to Asia for June is the highest since September. It’s only the third time the grade is being sold at a premium to the benchmarks since Saudi Arabia spearheaded the strategy of the Organization of Petroleum Exporting Countries to keep pumping out crude in November 2014. The group’s decision to maintain output as prices cratered forced a curtailment of higher-cost production elsewhere. Higher demand “Refinery demand is expected to recover,” said Ehsan Ul-Haq, a senior analyst at industry consultant KBC Energy Economics in London. “Cargoes loaded in June will arrive in Asia in July, when demand will return after the seasonal turnaround period. Saudi Arabia may also use more crude at home in the summer, when electricity usage typically rises.” Aramco will sell Arab Medium for June to Asia at $1.30 a barrel below benchmark prices, and Arab Heavy at a discount of $2.75 a barrel. The company raised the premium for Arab Super Light crude to Asia by $1 a barrel to $3.95 a barrel over benchmarks, and Arab Extra Light by 80 cents a barrel to $2.60 a barrel. The differential for Arab Light sold to the US was kept unchanged at a premium of 35 cents a barrel to the ASCI benchmark. Other grades for the US were all lowered by 20 cents month-on-month, resulting in a $2.40 premium for Extra Light, a $1.25 discount for Medium and a $1.75 discount for Heavy. Europe, Mediterranean Light crude to Northwest Europe was raised by 15 cents to a discount of $4.45 versus the benchmark. Other grades were also increased except Extra Light. Light crude to the Mediterranean was raised by 25 cents to a discount of $3.95 versus the benchmark. Opec, of which Saudi Arabia is the largest producer, abandoned its production ceiling at its most recent meeting in December. The group has pumped more than the previous 30 million-barrel-a-day target since June 2014. Saudi Arabia produced 10.27 million barrels a day in April.Opec is scheduled to meet 2 June in Vienna Karl Mecklenburg Womens Jersey
Flipkart, Snapdeal slash hiring in bid to cut costs
India’s largest e-commerce companies Flipkart Ltd and Snapdeal, which are struggling to raise fresh funds, have slashed hiring, along with spending on discounts and advertising, as they seek to cut losses amid a sharp slowdown in sales growth. Apart from hiring a few senior leaders, both companies have reduced hiring to a trickle over the past two months in order to cut costs, four people familiar with the matter said. Flipkart chief executive Binny Bansal has asked new human resources head Nitin Sethi to directly look at all hires at mid and senior levels, the people cited above said. Sethi is asking all business unit heads to justify hiring more people and is only allowing recruits that are judged to be “absolutely necessary”. Flipkart has put on hold hiring for many roles, including vice-presidents, that it had previously opened up in its supply chain, product and advertising teams, the people cited above said. Snapdeal, on the other hand, has upped performance targets for employees and wants to cull the bottom 10-15% of its staff, one of the four people cited above said, adding that the firm doesn’t plan to replace them. A Flipkart spokesperson said by email, “Your information is incorrect. Hiring at Flipkart has always been a function of business requirement and quality talent. Our hiring plans are in line with the business goals and we are continuing to hire rich talent in our areas of focus. Over the past years, we have built a team of outstanding global professionals. This year, we are also emphasizing focus on internal development of the rich talent we have already acquired.” A Snapdeal spokesperson didn’t respond to an email and a call seeking comment. In the 18 months to the end of last year, Flipkart’s workforce expanded to more than 35,000 people from roughly 14,000. More than half of these people work in the company’s logistics business eKart, delivering products to customers across India. Snapdeal, too, at least doubled its staff to 7,000-9,000 people in that period. (There are far fewer people on Snapdeal’s books compared with Flipkart, primarily because it doesn’t have full ownership of a logistics unit.) Last year, however, Flipkart and Snapdeal lost significant market share to rival Amazon India. At the same time, margins at the firms didn’t improve. Flipkart entities reported net loss of Rs.2,000 crore for the year ended March 2015 and Snapdeal posted a loss of Rs.1,328 crore for the same year. In the last financial year, losses at both firms are likely to have risen, according to analysts and investors. Mint reported on 14 April that Flipkart and Snapdeal have held funding talks with several investors over the past six months, all of whom have refused to invest in the firms at their preferred valuations of $15 billion and $6.5 billion, respectively. Mint also reported then that Flipkart’s sales haven’t grown month-over-month since November, while Snapdeal’s monthly revenues have declined since then. With sales growth slowing and investors souring on e-commerce, Flipkart and Snapdeal have been forced to conserve cash over the past few months. They have already cut spending on discounts since late last year and are trying to persuade their sellers to fund a larger part of the discounts on their sites. Apart from discounts and advertising, employee costs happen to be the largest expense for e-commerce companies. “Both companies hired so many people thinking that their GMV (gross merchandise value) would be at a certain level. But clearly, that hasn’t panned out. Now, there is a very sharp focus on cutting costs and conserving cash,” one of the four people cited above said. Last year, Flipkart and Snapdeal were at times hiring people first and finding work for them later, another of the four persons said. “This kind of frenzy has totally stopped in the last three months. Roles are now being clearly defined and so is the exact purpose of hiring,” he said. Stephen Vogt Womens Jersey
India, Iran agree to clear $6.4 billion in oil payments via European banks
The central banks of India and Iran have reached an arrangement to use European banks to process pending oil payments to Tehran, India’s oil minister Dharmendra Pradhan told Reuters, unlocking $6.4 billion in stalled funds. Buyers of Iranian oil were prevented from using global banking channels to clear their transactions after sanctions were imposed on Iran in 2011 over its nuclear programme. With the end of those sanctions in January, after an agreement to curb the programme, Iran is finally gaining needed access to the funds. Iran hopes the money will revive its moribund economy and raise Iranian living standards as well as help to integrate the country into the global economic system. Indian refiners have been holding 55% of its oil payments to Iran after a route to make payments through Turkey’s Halkbank was stopped in 2013, although payment of some of those funds was allowed after an initial temporary deal to lift the sanctions. “There is an agreement between (India and Iran’s) central banks. European banks will be the clearing agent. They will be dealing with Iranian banks and we have to pay those European banks,” Pradhan told Reuters in an interview. He did not elaborate further, saying the finance ministry was dealing with the issue. Also because of the previous sanctions, Indian refiners have been depositing 45% of their oil payments to Iran in rupees with India’s UCO Bank. Tehran has been using the funds, currently about Rs.13,000 crore ($1.95 billion) to import non-sanctioned goods from India. Indian government sources said during Pradhan’s visit to Tehran last month Iran had asked India to consider clearing the oil payments through Europaeisch-Iranische Handelsbank (EIH) of Germany, Central Bank of Italy and Halkbank of Turkey. One of the sources said the Reserve Bank of India (RBI) has ruled out channelling funds through Halkbank. “Halkbank’s Iran-related foreign trade activities with Iran have been carried out since 2004 … Halkbank will continue its operations in accordance with international law,” a senior Halkbank official told Reuters. No immediate comment was available from EIH and Central Bank of Italy. The government sources said Indian refiners will remit funds to Iran through state-owned UCO Bank. UCO Bank’s chairman did not respond to calls from Reuters to his mobile phone. Reserve Bank of India governor Raghuram Rajan said on 5 April India will make payments to Iran in a staggered manner. “Oil companies are working out the banking arrangements in coordination with Iranian counterparts and payments will be made by them presumably over time with minimal impact on the market,” an RBI spokesperson said on Thursday. Despite the sanctions, India continued its engagement with Iran and was among a handful of countries that sourced oil from Tehran. Iran was India’s second-biggest oil supplier before the sanctions hampered its trade relations. The country is set to import at least 400,000 barrels per day of Iranian oil in the year from 1 April. Darrell Green Authentic Jersey
India to gradually move to gas-based economy: Dharmendra Pradhan
India plans to shift to a gas-based economy by boosting domestic production and buying cheap liquefied natural gas (LNG) as the world’s third-biggest oil importer seeks to curb its greenhouse emissions, oil minister Dharmendra Pradhan said. New Delhi has promised to shave a third off its emissions rate by 2030, partly by boosting the use of cleaner burning fuels. “Gradually we are shifting towards a sustainable gas economy,” Pradha said. Gas accounts for about 8 percent of India’s energy mix, while oil accounts for more than a quarter. India’s gas supply deficit is expected to widen from 78 million cubic metres a day (mscmd) this fiscal year to 117 mscmd in 2021-22, according to a government estimate. India recently negotiated better terms for a long-term LNG deal with Qatar and importer Petronet LNG is in talks with Exxon to renegotiate pricing for gas from Australia’s Gorgon project. “The price should be affordable to us. We respect long-term contracts but everybody has to appreciate the changing scenario,” said Pradhan. “In a bigger canvas … India has the potential of a huge market base”. Pradhan last month visited Saudi Arabia, the United Arab Emirates and Iran to deepen ties with its main oil suppliers. “We want to move beyond a buyer-seller relationship,” he said, adding that India was offering them stakes in its pipelines, petrochemical complexes and refineries. India is also in talks with Abu Dhabi National Oil Co and Saudi Aramco to lease strategic oil storage. GAS GIANT Pradhan said Prime Minister Narendra Modi’s visit to Iran later this month would “certainly” deliver concrete results. Iran has set aside its Farzad B gas field for development by Indian firms, a move that could result in the building of an LNG plant as India consumes or markets its production share, he said. Over two years Asian LNG prices have slumped by three quarters to $4.65 per million British thermal units (mmBtu). Pradhan expects hefty LNG investments worldwide to ensure affordable long-term prices, a trend that “will suit India as a consuming country.” GAS CONNECTIVITY India is building import terminals on its eastern and western coasts and pipelines to boost industrial use of gas. In the fiscal year to March, India’s gas production declined by about 4.2 percent, while imports rose around 15 percent. India recently offered better gas pricing to boost domestic output, but its most recent investment in an LNG terminal in the southern state of Kerala has been underutilised since it lacks pipelines to connect to demand centres after farmer opposition caused land acquisition problems. Pradhan said the government was talking to the states and hoped obstacles to a pipeline connecting Kochi to Mangalore would be resolved after state elections in Kerala. Clay Matthews Womens Jersey
IT tools monitoring 900 highway projects worth Rs 6 lakh crore: Nitin Gadkari
To expedite pace of infrastructure building in the country, the Centre is using IT applications on a large scale to monitor 900 highways projects worth Rs 6 lakh crore, Union Minister Nitin Gadkari today said. “We have decided to use IT applications on a large scale. We are monitoring 900 projects worth Rs 6 lakh crore. We can see the progress. By monitoring, we can increase efficiency,” Road Transport and Highways Minister Gadkari said addressing an event, IT For Parivahan. The minister said the government has managed to roll out majority of the 403 projects worth Rs 3.8 lakh crore that were stuck when the current NDA government took over. “Some problems are related to 21 projects that are valued at Rs 30,000 crore, but we will very soon resolve these,” Gadkari said. He said some innovative initiatives by the ministry, like the launch of a portal for making available cement and steel had resulted in availability of 250 lakh tonnes of cement for infrastructure projects at affordable rates. Likewise e-tolling on 380 plazas across the nation would result in saving precious time and money he said pointing out to a study by IIM Kolkata which calculated that delays at toll plazas resulted in Rs 60,000 crore loss annually. Gadkari said steps were on to augment the length of National Highways to two lakh km. The minister said when the BJP government took over, the length of national highways was barely 96,000 km of the 52 lakh km of total road length and 2 per cent of the National Highways bore 40 per cent of the traffic. He said efforts were also on to reduce the logistics cost from the present 18 per cent to at least 8 per cent and that is bound to boost exports 1.5 times. NHIDCL Director Sanjay Jaju said various efforts were on to integrate IT applications with ministry’s functioning. IT-Task Force Member Vineet Goenka said information technology should be used as a decision support system in strengthening, maintaining and upgrading national transport system. Wayne Gallman Authentic Jersey
Jewar Airport Under Consideration
Government of India (GoI), Ministry of Civil Aviation has received a proposal from Government of Uttar Pradesh (GoUP) in April, 2016 for grant of Site Clearance for proposed Noida International Airport near Jewar, Dist. Gautam Budh Nagar, Uttar Pradesh. GoI has notified a Greenfield Airport Policy, 2008 to provide guidelines for setting up of new airports in the country. As per the Greenfield Airport Policy, the proposal has been sent to Airports Authority of India (AAI), Directorate General of Civil Aviation (DGCA) and Ministry of Defence (MoD) for their comments/observations on the site identified for setting up of International Airport near Jewar, Uttar Pradesh. The proposals are considered by Steering Committee set up in Greenfield Airport Policy in consultation with AAI, DGCA and MoD. Adam Lind Jersey
Expansion of Bhuntar Airport
Kullu (Bhuntar) airport is an operational airport and is suitable for operation of ATR type of aircraft with load restrictions in fair weather conditions. As per the study report submitted by IIT Roorkee, the runway can be extended by 550m subject to diversion of river Beas and acquiring additional 1000m x 200m land in the river bed by the State Government. Flight operations in domestic sector have been deregulated and the airlines are free to operate anywhere in the country subject to Route Dispersal Guidelines (RDG) issued by the Government. However, the airline operators provide air services to specific places depending upon the traffic demand and commercial viability. The draft National Civil Aviation Policy 2015 envisages implementation of Regional connectivity scheme with affordable fare by way of revival of unused and under-served aerodromes/airstrips and by viability gap funding for airline operators etc. to meet the demands of increasing traffic and to avoid air congestion. No definite timeline for expansion of Bhuntar airport can be drawn at this stage as it is for the State Government to demarcate and acquire the land, complete the process of river training / river diversion etc. and to hand over the land to AAI for extension of runway. Rod Smith Jersey
Setting up of New Airports
Government of India (GoI) has granted ‘in-principle’ approval for setting up of 14 Greenfield airports namely, Mopa in Goa; Navi Mumbai, Shirdi and Sindhudurg in Maharashtra; Shimoga, Gulbarga,Hassan and Bijapur in Karnataka; Kannur in Kerala; Pakyong in Sikkim; Datia/Gwalior (Cargo) in Madhya Pradesh; Kushinagar in Uttar Pradesh; Karaikal in Puducherry; and Dholera in Gujarat. Further, Government has laid down Route Dispersal Guidelines (RDG) of air transport services taking into account the need for air transport services of different regions of the country. However, it is up to the airlines to provide services to different regions depending on their commercial viability subject to compliance of RDG. As per the Greenfield Airport Policy, 2008, financing and development of a Greenfield airport is the responsibility of the Airport developer. Government of India has established Airports Economic Regulatory Authority of India (AERA) under the Act of Parliament, AERA Act, 2008, for determination of charges in respect of aeronautical services provided at major airports in the country. AERA determines aeronautical charges for each airport separately considering various aspects of the airport viz. investment on infrastructure, cost of operations, improvement of service level, viability of the airport etc. Fuel charges component on airfare is levied by airlines under the provisions of Rule 135 of Aircraft Rules, 1937 according to which every air transport undertaking engaged in scheduled air services are required to establish tariff having regard to all relevant factors, including the cost of operation, characteristic of services, reasonable profit and the generally prevailing tariff. As per approved summer schedule 2016, there is no scheduled flight to/from Mount Abu. Nate Thurmond Jersey
Air Connectivity to Unserved Areas
Airports Authority of India has appointed a Consultant for undertaking a study for promotion of Regional and Remote Area Air Connectivity in the country during 2013 based on population, economic potential, tourism potential and lack of existing air connectivity. No case of deviation of the Route Dispersal Guidelines (RDG) by any domestic airlines have been observed as per the monthly traffic data analysis by DGCA. Dholera at Navagaon village, Ahmedabad has been granted in-principle approval and Bhiwadi in Rajasthan, Bhogapuram, Dagadarthi and Oravukallu in Andhra Pradesh have been granted site clearance in the last three years. Government has streamlined aircraft import procedure in order to reduce time and hassle free import of aircraft by the scheduled domestic airlines for their capacity enhancement in a timely manner. The draft Civil Aviation Policy 2015 envisages implementation of Regional Connectivity Scheme with affordable fare to cater to middle class income bracket by way of revival of unserved and underserved aerodromes/airstrips and unserved cities. It also envisages for revival of unserved and underserved aerodromes / airstrips and unserved cities, depending on demand as no frills airports. Johan Franzen Womens Jersey
Mondelez gets income-tax breaks for factory found non-existent by excise Department
What’s anathema to one arm of the government appears to be kosher for another. Last December, a Mumbai income tax dispute resolution panel (DRP) allowed Mondelez India Foods, formerly Cadbury India, to claim tax breaks of about Rs 90 crore from 2010 at its chocolate factory in Baddi, Himachal Pradesh. In March 2015, the central excise department had found that the company had tried to pass off part of its already existing factory as a second unit to claim excise benefits on offer under a promotional industrial policy. The department claimed back duties of Rs 342 crore and fined Mondelez India Rs 242 crore for evasion. It also penalised top company officials for making fraudulent claims and some state government officials for helping them create documentation to show two distinct factory units existing before March 31, 2010, the sunset date of the industrial policy. The income tax DRP relied on the excise department order to allow the company tax waivers arguing that levying of excise duties showed that the company had actually commenced production in a separate unit. On March 25, 2015, the same day that the excise department had ordered penalties, an income tax assessment officer had denied the company tax benefits citing proceedings by excise officials. The DRP order overturned the assessment officer’s ruling saying that he did not get a chance to look at the excise department’s findings. The DRP ruling comes at a time when the US stock market regulator Securities and Exchange Commission and the Department of Justice (SEC-DoJ) are investigating Mondelez International, the company’s American parent, over allegations that it paid bribes for government approvals and documentation to show the phantom factory at Baddi as real. An ET investigation published in its edition of December 8, 2015, showed how Mondelez’ top management in the US knew about the irregularities at least three months before the SEC-DoJ began their probe. Earlier this year, the Central Bureau of Investigation started looking into the matter after the SEC-DoJ sent a formal request for assistance in its investigation. Mondelez claimed income tax benefits based on the date on which it began commercial production of 5-Star bars, button-shaped Gems and Cadbury Dairy Milk chocolate from its so called Unit II. The DRP order states that commercial production of 5-Star and Gems began in June 2009 and Cadbury Dairy Milk from March 30, 2010. ET tried to contact the DRP members. One of them said he could not remember the Mondelez case specifically as he dealt with hundreds of cases. The other two could not be reached. In reply to an ET questionnaire, Mondelez said: “We have received a favorable order from the IT department in December 2015. A compliant and ethical corporate culture, which includes adhering to laws and industry regulations in all jurisdictions in which we do business, is integral to our success.” The company’s internal communications, documents and the excise department’s order that ET reviewed, however, paint a fuzzy picture. Barely six weeks before the day the company claims it began commercial production, its finance director Rajesh Garg wrote an email to CEO Anand Kripalu with the subject line “Will need 10mins to walk you thru a Baddi Unit 2 related issue/opportunity”. Garg said in an email of February 19, 2010, that the supply chain folks were pushing to move some chocolate from Unit I to Unit II via a pipeline to start trial runs of the new line, till Unit II making gets up and running. “Pumping chocolate from unit 1 to 2 is a cardinal sin per the whole concept,” Garg wrote. “We have worked a plan to let them do this. I want to bounce off the risk with you before I give them the green signal.” The government notification on income tax breaks to industrial units clearly mentions that a company cannot claim tax benefits by splitting up or reconstructing an existing unit. However, the company had applied for deamalgamating the Unit II and got a conditional permission from the government on March 16, 2010. In August 2009, two months after commercial production of 5-Star and Gems is supposed to have started, Jaiboy Phillips, the supply chain head of the company sent a detailed memo to split the production lines into two units to claim tax benefits. “A tax position can be taken that Garuda [that makes 5-Star and Gems] and E4 [moulded chocolate] is a separate Unit (Unit-2) within the same factory. A key change required to our current design is to separate all common core processes akin to a common fountain and referred to as the “fountain principle”,” Phillips wrote in the memo seeking approval for a total expenditure, including capex, of 5.5 million pounds. In other emails as late as November 2010, officials were still discussing expansion of production lines at Baddi. “By modifying Everest to secure a bigger new line for Baddi the production start up appears to have been delayed from Q4 2009 to Oct 2010,” Carolyn Gibbs, the company’s audit chief, wrote in an email to colleagues seeking more information on the rationale for expansion at Baddi. In March 2011, during the course of an internal investigation into allegations of bribery and forgery by company officials for securing government approvals, Mondelez asked its legal head Shivanand Sanadi whether a separate unit existed on June 29, 2009 or March 31, 2010. Sanadi pointed out the inconsistency in various documents and applications for government approvals. He also recommended to Mondelez to make full disclosure to the authorities. When contacted, Sanadi told ET that the external lawyers hired by Mondelez too had given a similar opinion in the context of Unit II, that they had noticed inconsistencies in various applications and approvals. He added that this statement had also been recorded in his submissions in legal proceedings of the excise department against Mondelez and in the excise order. The DRP relied on the excise order showing that Mondelez received factory licence for Unit II on July 28, 2010, and