Govt to double operational airports to 150
The central government yesterday said that it is trying to double the number of operational airports in the country from 75 to 150, under the ambitious regional connectivity scheme (RCS). According to Minister of State for Civil Aviation Jayant Sinha (pictured), under RCS christened as UDAN (Ude Desh ka Aam Naagrik), the central government is working to expand the aviation map of India from 75 to 150 airports. The minister elaborated that recently Kanpur and Bhatinda airports became operational under the scheme. Sinha was addressing the 89th Annual General Meeting of Federation of Indian Chambers of Commerce and Inustry (Ficci). Pat Elflein Jersey
Centre keen to recast Air India debt: Raju
The Centre is exploring the idea of restructuring the debt of state-owned Air India, and is willing to talk to those who are interested in picking up a stake in the airline. “There is an idea circulating that Air India will do better if its debt is restructured,” Union Civil Aviation Minister Ashok Gajapathi Raju told BusinessLine. However, he also stressed the need to evolve a consensus on the matter within his own Ministry. “Once you convince yourself, it is easier to convince the others.” Air India, which has been posting losses for years now, has a debt of around ?46,000 crore. Raju made it clear that Air India cannot expect support from the government all the time. “I am not someone who will indulge in ‘Air India-bashing’, but neither am I going to commit the taxpayers’ money for eternity.” He said the Centre was willing to help the airline “pull up its socks as they have done India proud on several occasions”. The airline needs to survive and a strategy to that end will be put in place. Brice Butler Womens Jersey
India will need $10-15bn for aviation infra
The country will require between $10 billion and $15 billion for the growth of aviation infrastructure. Civil Aviation Ministry Ashok Ganapathi Raju told a conference on aviation here on Saturday that additional allocation is needed for this purpose. “We have a situation where certain airports are choked while there are 30 others which are lying unused,” Raju a cabinet ministry in the Union Government said. Raju told SITA aviation ICT conference here that the government has identified 40 roles in the aviation industry for skill training. This will help the industry to access a readily available pool of skilled and trained personnel in the country itself. Trevor Siemian Womens Jersey
Auto LPG cleaner fuel, 50% cheaper than petrol: Study
New Delhi, Auto LPG is the most effective option for converting the existing pool of petrol-fuelled cars and bikes into more environment-friendly vehicles, an industry body said on Monday. Auto LPG is fast emerging worldwide as a cleaner and much cheaper alternative to petrol and diesel, even better than compressed natural gas (CNG) fuel, the Indian Auto LPG Coalition (IAC) said on Monday, citing a study it has commissioned. The study conducted by the Marketing and Development Research Associates (MDRA) said while auto LPG’s operating expenses are up to 50 per cent lower than petrol, LPG vehicles are cheaper than CNG ones, and the investment in auto LPG infrastructure and installation time are lower than for a CNG station. The study said the most significant advantage of auto LPG is its contribution to improving the air quality. “Auto LPG is the most effective option for converting the existing pool of petrol-fuelled cars and bikes into more environment-friendly vehicles. It also provides tremendous opportunity to avoid usage of highly polluting carcinogenic diesel-fuelled cars for personal and public transport,” the IAC said. “Auto LPG is currently available in more than 500 cities across India, including 19 outlets in Delhi. It is already the preferred fuel in south India, and fast catching up in other parts of the country,” it added. The auto LPG body cited the World Health Organiaation data that 13 out of 20 most polluted cities in the world are from India. “Delhi tops this list with 153 micrograms of PM2.5 per cubic meter, while PM2.5 should not exceed 10 micrograms per cubic meter. Health cost of air pollution in India has been assessed at 3 per cent of its GDP,” it said. “Among the cleaner fuels, auto LPG is the most suited as it can be fitted in two-wheelers as well,” IAC President and Executive Director of state-run Indian Oil Corp Y.K. Gupta said in the statement. “More than 26 million vehicles run on auto LPG globally in more than 70 countries, and therefore auto LPG has become the third-largest selling fuel in the world, after petrol and diesel,” he added. Joe Kelly Womens Jersey
Industry’s top choice of fuel cheap but deadly
The national capital region (NCR) may be one of the most polluted regions in the country but many industries located here are still running on an extremely polluting fuel-furnace oil. A substantially cheaper alternative to natural gas and diesel, FO, as it is called in industrial terminology , is marginally better than bitumen in quality .It emits substantially higher particulate matter (PM) and secondary sulphate particles, said scientists. The widespread use of FO came to light only recently after the Supreme Court-mandated Environment Pollution Control Authority (EPCA) investigated its use in NCR and submitted a report to SC. The report also highlighted the use of pet coke, another high sulphur fuel, in NCR. Industries in Ghaziabad’s Sahibabad and Loni Road industrial areas admit that they use FO despite knowing how harmful it is for environment. A large steel company TOI visited in Sahibabad, for instance, runs its generator on FO and natural gas. “It’s a 30:70 ratio, with FO making 70% of the fuel. It’s cheap and serves the purpose. I don’t think the Supreme Court can ban it because industries are a powerful lobby . Also, what will oil refineries do with the FO they generate?“ said its head of purchase. FO is priced around Rs 25 per litre, compared to Rs 56.76 for diesel, Rs 69.3 for petrol and Rs 24.5 per standard cubic meter for piped natural gas. About three months ago, the price of FO fell to Rs 15 per litre due to the dip in crude oil prices. “The prices fell seven times in the past year or so. It just makes economic sense for industries to opt for a cheaper fuel. Of course, it’s way more polluting and you can tell from the chimney smoke whether a factory is using FO. It’s usually black or blue smoke. That’s why we invested in piped gas supply ,“ said a senior representative from another steel company’s hot rolling and heat treatment division. TOI also found several dyeing, paper recycling and glass industries using FO. A representative from Indo Petro, a dealer, said, “Many industries in Delhi too use it illegally because it’s cheaper.“ Anant Bhargav, director of IFP Petro Products, said, “The government can have Bharat Standard (BS)-type norms for industrial fuel. Some industries even use very toxic tyre oil made from used rubber and ty res. Major dealers supply these fuels.“ Around 30 forging industries use FO in Ghaziabad, added an Industrial Area Manufacturer’s Association member. Mukesh Sharma, scientist at IIT Kanpur and author of Comprehensive Study on Air Pollution and Green House Gases (GHGs) in Delhi -the latest source apportionment study , said, “The PM emissions from FO are substantially higher than other liquid or gaseous fuels. Since the sulphur content in FO and pet coke is high, a large amount of sulphur dioxide (SO2) is released that converts into fine sulphate particles in the atmosphere.“ The sulphur content in FO is 15,000 to 20,000 ppm and about 70,000 ppm in pet coke compared to around 50 ppm in diesel. Scientists recommend that high sulphur fuel should only be used in cement industries because the calcium oxides generated in these factories can neutralise the sulphur emission. During a recent hearing in SC, a lawyer representing the Centre sought time to respond to EPCA ‘s submission. The apex court has given the Centre four weeks to examine whether pet coke and FO, if used as industrial fuel, is harmful. “In case the government comes to the conclusion that its use is indeed harmful, it may consider issuing appropriate directions in terms of Section 3(2)(v) of the Air Act,“ the order said. According to EPCA ‘s report, a big manufacturer of solar panels, a glass company and steel companies are using FO. Apart from PSUs, a private company also supplies FO. Cody Latimer Authentic Jersey
Mongolia pegs $1 billion from India for oil refinery, pipelines
Mongolia will seek approval from the Import-Export Bank of India to build an oil refinery and pipelines with $1 billion in infrastructure funding negotiated last year, a project that could boost the nation’s gross domestic product by 10%. The government intends to use $700 million of the loan for an oil refinery and $264 million for oil pipelines, according to a statement on its website last week. Mongolian prime minister Erdenebat Jargaltulga has instructed relevant ministries to negotiate with the Ex-Im Bank of India, according to the statement. Prime Minister Narendra Modi signed agreements last year to provide the $1 billion credit line to fund railroad and infrastructure projects in Mongolia. The Indian Ambassador in Ulaanbaatar Dr. T. Suresh Babu didn’t immediately respond to an email seeking comment. Mongolia is looking to India and other investment partners as its economy contracts and its debt burden grows. Last month, China backed off from talks with Ulaanbaatar over a loan package to help the economy after a dispute over the visit to Mongolia by the Dalai Lama. The refinery, to be sited in Sainshand county, will have a capacity to process 1.5 million metric tonnes of oil per year. It will produce 560,000 tonnes of gasoline, 670,000 tonnes of diesel fuel and 107,000 tonnes of liquefied gas annually. The refinery could boost Mongolia’s GDP by 10%, according to the statement. Sainshand, located on the Trans-Mongolia railway, is planned to be a transportation hub. Mongolia’s oil fields are primarily located in Dornod province in eastern Mongolia, about 545 kilometers northeast of Sainshand. PetroChina Daqing Tamsag Llc operates the oil fields and has produced 7.5 million barrels through the first 11 months of this year, according to the National Statistical Office. All of Mongolia’s crude is exported to China. The 20-year loan will have an interest rate of 1.75% and principle payments will be waived during the five years, according to the April statement. Mongolia imported 346,500 tonnes of gasoline worth $172 million and 479,800 tonnes of diesel worth $219 million in the first 11 months of this year, according to the NSO. More than 97% of the petrol and diesel was imported from Russia. Reggie Jackson Jersey
Total to give rivals storage space as Gapco buyout is approved
The Common Market for Eastern and Southern Africa (Comesa) Competition Commission has ordered French oil marketer Total to open up storage facilities of a regional dealer it has acquired to third parties, as a ¬condition for approving the takeover. The regional competition watchdog also wants Total to honour contracts Gulf Africa Petroleum Corp (Gapco) has with its employees. Total Outre Mer SA agreed to buy Gapco from India’s Reliance Industries for an undisclosed amount last May as it seeks to strengthen its presence in Africa. Reliance, which had 76 per cent stake in Gapco, and the minority shareholders agreed to sell their holdings for cash to Total. On Friday, the regional agency said the transaction did not raise any competition concerns in the rest of the common market. “The competition concern in the Kenyan market pertained to the provision of storage facilities to third parties post-merger and employment issues. We noted that Gapco is one of the significant players that provide storage for third parties, and expressed concerns that the post-merger entity may not provide storage to third parties,” it said. The watchdog added that following the concerns, both Total and Gapco have submitted undertakings to remedy the competition fears in Kenya. “The undertakings relate to maintaining the provision of storage facilities to third parties and ensuring that Gapco will honour the short-term and long-term employment contract currently in effect,” it said. Total sought the Comesa nod for a merger between it and Gapco in July. “The commission assessed whether the proposed transaction between the parties would have the effect of substantially preventing or lessening competition,” said the regional regulator in a press statement. With the acquisition, Total aims to raise its market share in Africa from 17 per cent in 2015 to more than 20 per cent. “This acquisition is in line with Total’s growth strategy for the distribution of petroleum products and services in Africa, which aims at expanding in fast-growing regions while maintaining high profitability,” Momar Nguer, president Total Marketing and Services said in May. Gapco’s assets in Tanzania, Kenya and Uganda include logistic terminals, 108 fuel stations, and 260,000 kilo-litres of storage capacity. Total currently operates a network of more than 4,000 fuel stations in Africa. Marcus Davenport Jersey
Worries around OMCs appear to be overdone?
Stocks of oil marketing companies (OMCs) namely Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) have lagged the S&P BSE Sensex since December 9 as the Opec and non-Opec nations agreed to cut crude oil production by 1.2 million barrels of oil equivalent per day from January 1, 2017. These stocks have fallen anywhere between 2-6 per cent in this period versus a per cent fall in the Sensex. While crude oil prices have come off by 0.6 per cent to $53.25 a barrel in this period, most analysts expect this metric to surge going forward and touch $60 a barrel levels. Rising crude oil prices are negative for OMCs as they may not always be in a position to pass on this hike and it is also likely to result in higher working capital requirements. But the fears around these stocks could have been overdone. Historical evidence suggests that the government has deployed excise duty as an efficient tool to reduce the burden of rising crude oil prices on both the OMCs as well as the end consumers. The trend is likely to continue this time around as well, estimate analysts. “We believe at $60 a barrel, excise duty rollbacks are likely, and possibly VAT cuts too. These cuts would be structurally positive for OMCs and reduce the risk of adverse marketing margins,” says Sabri Hazarika of PhillipCapital. Though the jury is out on whether the government would bear the entire burden of oil price increase, even a partial support on this front would aid OMCs. “If the government bears the entire brunt of the increase in oil price by cutting duties so as to leave the final retail selling price (RSP) unchanged, it could suffer a revenue loss of 0.5 to 0.7 per cent of GDP for oil between $60-65 a barrel,” estimates Suhas Harinarayanan of JM Financial. If the government shares half of this burden, he believes it could lead to a revenue loss of 0.32 to 0.45 per cent of GDP. In an unlikely scenario of the OMCs passing on the entire price increase to the end consumers, retail petrol and diesel prices could surge 16-19 per cent over December 1, 2016, estimate analysts. This scenario though seems highly unlikely as the government has asked the OMCs to raise prices in a protracted manner. An important change for OMCs is announcement of 0.75 per cent discount on sale of petrol and diesel via cards and e-wallets implying a hit of Rs 0.4 to 0.5 per litre on these fuels. “This move is not necessarily margin dilutive, as OMCs can offset the earnings hit through higher margins given the pricing freedom. It could introduce quarterly volatility in marketing earnings, as actual margin realisations would depend on the share of digital payments,” writes Sanjay Mookim of Bank of America Merrill Lynch in a recent report. For now, it seems that the recent stock price correction seems to ignore some of the positives for the OMCs. One, consumption demand continues to grow at a healthy clip in India with demonetisation adding fuel to the consumption fire. Second, de-regulation of kerosene and LPG prices since July have led to an increase of 18 per cent and 4 per cent respectively in their prices. Third, reduced under-recoveries burden on the OMCs will aid their profitability. “We see budgeted subsidy available for FY17 at Rs 170 billion; hence, about Rs 185 billion of projected under-recoveries would largely be managed,” adds Hazarika. Lastly, higher oil prices could lead to inventory gains (in the short term at least) and boost gross refining margins of the OMCs. In this backdrop, most analysts are positive on the three companies. HPCL is a direct play on crude oil prices, potential upsides from the exploration and production activities could further aid BPCL’s prospects. IOC too stands to benefit from ramped up capacities at its Paradip refinery kicking in. Austin Watson Jersey