Discoms fail to curb power loss after two decades of reforms
Even after two decades of power sector reforms, power distribution companies (discoms) of the State have failed miserably to contain the high Aggregate Technical & Commercial (AT&C) losses. The overall AT&C loss of the four discoms – Central Electricity Supply Utility (Cesu), North Eastern Electricity Supply Company (Nesco), Western Electricity Supply Company (Wesco) and Southern Electricity Supply Company (Southco) in the low transmission (LT) sector in the last fiscal was 57.67 per cent. The average AT&C loss of the four discoms (both in LT and high transmission category) is nearly 39 per cent. The State Government had targeted to bring down the loss to 26 per cent by 2019. One per cent reduction of AT&C loss is expected to contribute `80 crore per annum to the State Government. With an AT&C loss of 52.79 per cent in 2015-16, Cesu was able to reduce the loss by 2.32 per cent from the previous fiscal. However, loss reduction by Nesco was very marginal. The company reduced its loss level by 0.76 per cent from 56.38 per cent in 2014-15 to 55.62 per cent in 2015-16. The LT loss of Wesco was highest among the four discoms. Despite having the advantage of highest number of HT consumers, the utility has utterly failed to bring down the AT&C loss in the LT category. The company’s AT&C loss was 72.69 per cent in the last fiscal as against 72.69 per cent in 2014-15. Having majority of its consumers in the LT category, Southco was able to reduce the AT&C loss by 1.95 per cent from 56.34 per cent in 2014-15 to 54.39 per cent in 2015-16. The discoms failed to bring down the AT&C loss despite infusion of fund from the State Government through various programmes including the ambitious Capex programme. The Capex programme was launched to cut AT&C loss by three per cent each year. Besides, the Government has also sanctioned fund for installation of 550 new 33/11 KV sub-stations in different blocks of the State for strengthening of distribution system, reduction of T&D losses and to ensure supply of quality power to consumers. The project estimated to cost `4,500 crore is still under implementation. Josh Doctson Jersey
Notice served to stop power supply to JBVNL from Oct 16
Patratu Vidyut Utpadan Nigam (PVUNL) today issued a notice to Jharkhand Bijli Vitran Nigam Limited (JBVNL) threatening to stop power supply from coming Sunday due to non-payment of energy bills by the discom. Patratu Vidyut Utpadan Nigam Limited (PVUNL) is a joint venture company of NTPC and Jharkhand Bijli Vitran Nigam Limited (JBVNL). The notice for regulation of power supply to JBVNL has been served due to non-payment of outstanding dues of Rs 44.23 crore beyond 60 days, Vishwanath Chandan Deputy Manager (PR), Eastern Region -1 Headquarters, Patna said in a statement. The cumulative pending amount from April 2016 to September 2016 is approximately Rs 82.44 crore from the date of presentation of bills and non-opening of LC for the requisite amount, he said. This is in line with CERC (Regulation of Power Supply) Regulations, 2010 and as per supplementary PPA signed between Patratu Vidyut Utpadan Nigam Limited and Jharkhand Bijli Vitran Nigam Limited on March 30, 2016, Chandan said. The power regulation would be implemented from October 16, 2016, he added.
Lack of reforms created huge NPAs in infrastructure, power sectors: Arun Jaitley
Finance Minister Arun Jaitley on Thursday blamed the successive governments’ inability to bring in reforms in the infrastructure and power sectors for the rising non-performing assets in the core segments. He said there are a number of sectors which have been impacted by the global slowdown, but some of these were hit more because of the absence of reforms. “There are at least two sectors – infrastructure and power- where we can’t blame external factors. Our own inability to bring in reforms adequately in these sectors, I think, caused the difficulty (in banks books),” Jaitley told the BRICS Economic Forum here. Elaborating further, the Union Minister said that in the infrastructure sector the key problem is the inability to adequately and quickly settle the disputes. “We allowed them to pester for an indefinitely long period and now we have taken a number of steps, including amending laws, setting up faster courts, among others. I do hope we are able to get out of it,” the minister said. While accepting that absence of reforms in state discom led to a stress in the power sector, Jaitley said, “I think the only silver lining is that the causes of the stress (in power sector) have been analysed quickly and correctly, and now we are addressing those problems.” He said bringing reforms in the country has become more easier now than it was some years back. “I think there is a lot of maturity, which has come into the country’s political system and this is noticed from the fact that reforming in India today is no longer as challenging as it used to be say 10 or 20 years ago,” he said. It can be noted that most of the over Rs 8.5 trillion of dud loans of banks, a large chunk are their exposure to infra and power sectors. He noted that even at the state level, there is an interest to bring in reforms to attract investment and to improve economic activities. Jaitley, however, said some of the challenges the country is facing today are due to high population and resource mobilisation. On the protectionist policies of the developed world, he said if this debate gets replicated in the developing economies or in the emerging markets, it probably would have extremely serious consequences. He said when the domestic economy was opened up, there were concerns that the country might be hit by protectionist policies of the developed nations, but those fears do not exist now. “As of now our economy has matured and we have got out of that (protectionist) debate. I can safely assume that today, in an economy like India, not even ripples of that debate are being felt, which you are otherwise witnessing in the developed countries itself,” he said. On the proposed BRICS Rating agency, Jaitley said the objective of setting up such an agency is to have a professional and independent entity and not to control it by a group of countries. Kwon Alexander Womens Jersey
Lanka, India hold joint exercise on oil spill prevention
Sri Lanka and India on Thursday held a joint oil spill prevention exercise onboard the Indian Coast Guard Ship ‘Samudra Paheredar’, which is on a two-day official visit to the island country. The Navy said that prior to the training exercise, the ship’s crew of ‘Samudra Paheredar’, personnel from Sri Lanka Coast Guard, Marine Environmental Protection Authority and Sri Lanka Navy participated in a two-day workshop which included a wide range of activities related to oil spill prevention, Xinhua news agency reported. The Navy said oil spills from vessels that occur as a result of sudden collisions with oil platforms and various other related reasons, had posed a significant threat on the marine environment to date. As both India and Sri Lanka are located close to one of the busiest network of international shipping lanes, the readiness is of paramount importance for both countries to take remedial action against oil spills. Mark Bavaro Jersey
BPCL plans to spend $6.8 billion on refinery expansion by 2022
India’s Bharat Petroleum Corp Ltd plans to spend $6.75 billion through 2022 to raise refining capacity by 62 percent to meet rising fuel demand in the world’s fastest growing major economy, a company official said. India is replacing China as the driver of global oil demand growth as its economy expands and a rising middle class buys motor vehicles. The International Energy Agency expects India to account for a quarter of global energy use by 2040. BPCL, the country’s second-biggest state refiner, aims to lift its crude processing capacity to 1.18 million barrels per day (bpd) by 2022 from the current 730,000 bpd, its head of refineries R. Ramachandran told Reuters on Wednesday. In the fiscal year to March 2016, Indian fuel demand rose to its highest level in at least 15 years partly because of the nation’s renewed manufacturing push under Prime Minister Narendra Modi’s ‘Make In India’ drive. “We are aiming for an economic growth rate of 7 to 8 percent so if that happens, Indian fuel demand is bound to grow. We will see a (fuel demand) growth rate which will continue to remain at 6 to 7 percent at least for the next 10 to 15 years,” Ramachandran said. About half of the planned refinery expansion spending will be used to raise the capacity of the Bina plant in central India to 320,000 bpd from 120,000 bpd. BPCL, which operates Bina in a tie-up with Oman Oil Co., will initially expand the capacity to 156,000 bpd by mid-2018, Ramachandran said, adding the overall expansion could cost 200 to 250 billion rupees ($3 billion to $3.75 billion). The refiner intends to spend about 100 billion rupees to expand its coastal plants at Kochi in southern India and Mumbai in the west. The company is currently raising the capacity of its Kochi plant by 63 percent to 310,000 bpd and plans to expand the plant to 400,000 bpd by 2022, Ramachandran said. “Mechanical completion is in-progress and final touches need to be given to some units. From next fiscal we will operate it at full capacity (of 310,000 bpd) on sustained basis,” he said. The Mumbai refinery expansion faces limitations because of high population density and land constraints. By 2022, BPCL will raise the Mumbai capacity by about 17 percent to 280,000 bpd, he said. BPCL also intends to triple the capacity at its Numaligarh plant in northeastern Assam state from 60,000 bpd currently, he said. The company would invest about 150 billion rupees, drawn by the potential to export to neighbouring countries. “Besides meeting local demand the refinery is positioned to also supply products from the plant to Myanmar, Bangladesh and Nepal,” Ramachandran said. However, the expansion hinges on the continuation of the federal tax incentives, he said. India gives some tax relief to refineries in the northeast to make them profitable as the fuel demand in the region is very low. Todd Gurley II Authentic Jersey
Cabinet approves revision of ethanol price for supply to oil firms
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Modi, today announced it has approved the mechanism for revision of ethanol price for supply to Public Sector Oil Marketing Companies (OMCs). OMCs will now be provided ethanol at a subsidized rate to carry out the Ethanol Blended Petrol (EBP) Programme The administered price of ethanol for the EBP Programme will be Rs 39 per litre during the next sugar season from 1st December 2016 to 30th November 2017. Additional charges will be paid to the ethanol suppliers as per actuals in case of Excise Duty and VAT/GST and transportation charges as decided by OMCs. Increase/reduction in the retail selling price of Petrol would proportionately factor in the requirement of maintaining the fixed cost of purchase of ethanol during the ethanol supply year. The prices of ethanol will be reviewed and suitably revised by Government at any time during the next sugar season depending upon the prevailing economic situation and other relevant factors. The revision in ethanol prices will facilitate the continued policy of the Government in providing price stability and remunerative prices for ethanol suppliers. The Government on started revision of ethanol prices in December 2014, and decided that the delivered price of ethanol at OMC depots would be fixed in the range of Rs. 48.50 per litre to 49.50 per litre including Central/State Government taxes and transportation charges. Lamin Barrow Authentic Jersey
Niti Aayog rejects OilMin’s Rs 100 billion demand to build new reserves
The government’s think-tank Niti Aayog has shot down petroleum ministry’s demand for nearly Rs 100 billion of public money for building more strategic crude oil reserves as the proposal strays from the agreed plan to rope in private sector investments for crude storage beyond the existing 5 million tonnes. While pointing out that there was neither plan fund allocated for the project nor any funding tie-up for it from other resources, Niti Aayog said that during the preparation of the 12th Five Year Plan the ministry had agreed to private sector involvement in building and operating strategic storage. “There is significant interest in global crude oil majors to create storages to secure markets and also on arbitrage on fluctuating prices. As regards energy security, as long as the crude is stored on our mainland, we will always have the first right,” it commented on the proposal. “Niti Aayog, therefore, is not in agreement with the proposal and recommends that the ministry ought to come up with a policy to encourage private sector investment instead of deploying government funds,” it added. Under the first phase, India built 5.33 million tonnes storages at Visakhapatnam, Mangalore and Padur to provide for 12 day supply cover. Of this, Visakhapatnam has been commissioned while the other two are slated to start by end of this year. National oil companies of Abu Dhabi, Kuwait and Saudi Arabia and private major Shell have expressed interest in storing oil at these caverns after India’s last Budget announced income tax exemption on sale of stored crude oil by foreign firms to local buyers as an incentive for foreign oil companies to lease space. However, foreign investors are awaiting regulatory issues such as local taxes and India’s ban on crude oil exports to be settled before pumping money in building storage facilities. Under Phase II, the petroleum ministry plans to build an additional 10 million tonnes of storage capacity at Bikaner (5.6 million) in Rajasthan and Chandikhol (4.4 million) in Odisha to take the strategic cover to 99 days from current 75 days (63 days at refinery plus 12 days strategic). For this, it had asked the Ministry of Finance to provide Rs 100 billion partly from plan funds and partly out of the oil industry development cess collected on crude oil production as there is no Budget provision for this project. Texas Rangers Jersey
ONGC, United Energy said to vie for $2 billion Chevron fields
Oil & Natural Gas Corp., the largest Indian oil and gas explorer, and Hong Kong-listed United Energy Group Ltd. are among bidders for Bangladesh natural gas assets being sold by Chevron Corp., people with knowledge of the matter said. United Energy submitted a joint offer with Chinese conglomerate Orient Group Inc., one of the people said. The gas fields, which could fetch as much as $2 billion, have also drawn interest from Brightoil Petroleum Holdings Ltd., the people said, asking not to be identified because the information is private. The Bangladeshi government has also expressed interest in taking over Chevron’s interests in the assets, according to the people. No final agreement has been reached with any party, the people said. Energy companies have announced $43.2 billion of asset sales this year after crude prices fell to the lowest level in more than a decade, according to data compiled by Bloomberg. Chevron, the largest US oil producer after Exxon Mobil Corp., is seeking buyers for Asian geothermal assets that could fetch as much as $3 billion and is also holding talks to sell assets in Indonesia and Thailand, people familiar with the matter said earlier. State partner The San Ramon, California-based company operates the Bibiyana, Jalalabad and Moulavi Bazar natural gas fields in Bangladesh and sells all the production to state oil company Petrobangla, according to its website. Its net daily production last year averaged 720 million cubic feet of natural gas and 3,000 barrels of condensate. “We can confirm that Chevron has been in commercial discussions about our interests in Bangladesh,” Chevron said in an e-mailed statement on Thursday. “At this stage, no decision has been made to sell our interests. We will only proceed if we can realize attractive value for Chevron.” Representatives for ONGC, United Energy, Brightoil Petroleum, the Bangladeshi energy ministry and Petrobangla didn’t immediately respond to requests for comment. Calls to Orient Group’s general line were unanswered.
India to double LNG import capacity to 50 million ton per year
India plans to more than double its liquefied natural gas (LNG) import capacity to 50 million tonnes a year, Oil Minister Dharmendra Pradhan told a news conference on Thursday, without giving a timeline. It has a capacity to import 21 million tonnes of the super-cooled fuel currently. As the nation moves to a gas-based economy, India wants to increase the share of natural gas in its energy mix to 15 percent in the next three-to-four years from 6.5 percent now, Pradhan said. Dawuane Smoot Jersey