IOC’s Mathura refinery despatches BS VI fuel for testing
IOC’s Mathura refinery has despatched BS VI high-speed diesel (HSD) to two auto companies to test viability and compatibility as part of its efforts to provide cleaner fuel for an eco-friendly environment. “Though the government has set a very stringent target of April 2017 for meeting BS IV and April 2020 for BS VI standard fuel quality, the Mathura refinery has completed the target ahead of the set deadline,” said S M Vaidya, GM, IOC Mathura Refinery. While Honda was supplied five barrels of BS VI standard HSD fuel, Mahindra & Mahindra Chennai received the same full one tanker (20 KL). Vaidya said: “BS VI standard HSD will contain only 10 PPM sulphur and motor spirit will be high standard also… since MS VI is also ready for testing, the refinery is having an interaction with automobile companies on this count.” He thanked Sanjiv Singh, Director Refineries, IOC, for helping complete the target ahead of the schedule. BS VI standard HSD and BS VI standard motor spirit, according to Vaidya, were prepared in the refinery without addition of any machinery. By October 2017, a new unit will go on stream at the refinery, where only BS VI standard HSD and high quality motor spirit will be produced on a mass scale. Expressing “time-bound commitment” of Indian Oil to provide required quantity of BS VI compliant HSD and MS fuel, he said it would enable automobile industries to re-design and test their engines with upgraded BS VI fuel in Indian climatic and road conditions. Interacting with reporters today, Vaidya felt that this would come as a moral booster for the entire automobile industry as oil companies are geared up to meet the target of BS IV and BS VI. Marcus Allen Womens Jersey
IGL may drop Rs 5,000 upfront deposit for piped gas
Looking to push up the conversion rate from liquefied petroleum gas (LPG) to piped natural gas (PNP) by domestic consumers, some of the natural gas distribution companies like Indraprastha Gas Limited (IGL) and Haryana City Gas Distribution Ltd (HCGDL) are considering waiving off the deposit amount of Rs 5,000 on every connection and replacing it with a rental of Rs 25-50 per month. While Haryana City Gas has yet to thoroughly study the financial implication of such a move, E S Ranganathan, managing director of IGL, told DNA Money that the gas company is likely to do away with the upfront deposit on every PNG connection in the Delhi-National Capital Region (NCR) soon. He said the plan has to be approved by his finance department and the Petroleum and Natural Gas Regulatory Board (PNGRB). It will not require the petroleum ministry’s nod. The IGL chief has even worked out the math of such a move. “What we are thinking is, suppose we charge as rent of Rs 25-50 a month, we can waive the Rs 5,000 paid upfront for each connection. This is anyway the customer’s money, which is returned when his service is disconnected,” he said. Ranganathan said currently IGL earns an interest of 6% on Rs 5,000 per year, which comes to Rs 300. He said this annual Rs 300 income per customer from the deposit could translate into a rent of Rs 25 per month. According to him, this will make it easier for new users to start using PNG, for which IGL has already laid the pipeline in areas under its jurisdiction. For instance, IGL, which has over 0.676 million customers in Delhi-NCR, has already spent aggressively on infrastructure to supply natural gas to domestic users, but in many areas, people were still not voluntarily shifting to PNG. Close to 0.25 million residents in these areas are still to make the switch; “there is a pipe reaching right till their homes, but since they have not opted for it, we have not connected it to their house”. Ranganathan feels one of the reasons for people not going in for the PNG connection was the upfront deposit. Initially, he tried to come around this problem by providing easier payment option of equated monthly installment (EMI) to customers but failed to make much dent with it. “When we went for EMI scheme of three installments of around Rs 1,500. People never accepted it. Now, we have introduced an EMI of Rs 500 per bill. This, too, is not working. It’s a human tendency. For instance, if you are paying Rs 800 per month and after shifting (to PNG), I suddenly give you Rs 700 bill for gas plus Rs 500 EMI, you will think I was spending Rs 800 and now I am spending Rs 1,200 per month and think it is expensive,” said IGL head. Rahul Chopra, CEO of HCGDL that distributes PNG in Gurugram, said his company will also evaluate the option and take a decision. He believes the monthly rental option was a more workable solution than deposit model to increase the use of PNG. “I think it is workable and will help increase the conversion rate (from LPG to PNG)”. Citing an example, he said that Haryana Gas had laid pipelines in front of many apartments in Gurugram, where conversion rate was barely 30-40%. “One of the reasons for this was high deposits. Also, many people do not opt for PNG because they are tenants. If there is monthly rent, then they can just take the connection and pay rent for it,” he said. Today, Haryana City Gas has 13 compressed natural gas (CNG) stations and 15,000 PNG domestic connections in Gurugram. Chopra said his company was targeting PNG connections of up to 0.1 million in the next few years. “Gurugram has a population of around 0.4-0.5 million and a 20%-30% penetration would help us break-even faster”. Mahanagar Gas Ltd (MGL), Gujarat Gas Company Ltd (GGCL) and others also take an upfront deposit for PNG connection and have not removed it yet. Clinton Portis Authentic Jersey
City Gas Distributors In A Sweet Spot
City gas distribution companies are poised to gain from rising crude prices and growing adoption of environment-friendly fuels. West Texas Intermediate crude has surged more than 17.6 percent since November 30, when the Organization of Petroleum Exporting Countries announced an agreement to cut production by 1.2 million barrels per day. “The OPEC decision will certainly benefit the city gas distributors,” Jal Irani, senior vice president of Edelweiss Financial Services told BloombergQuint on the phone. With the price of competing fuel, like petrol and diesel rising, the switch to much more economical CNG becomes viable. Jal Irani, Senior VP, Edelweiss Financial Services. Oil marketing companies have hiked prices of petrol and diesel twice since OPEC’s decision, and CRISIL Research expects the trend to continue in 2017. We expect the price of petrol to rise 5-8 percent and that of diesel by 6-8 percent over the next 3-4 months after decision by the OPEC. CRISIL Research Report In the first seven months of the financial year 2016-17, the consumption of natural gas in India grew around 8.5 percent. The demand for petrol and diesel rose 8.9 percent in the same period, while crude oil prices increased 22.2 percent. The growing demand translated into higher stock prices, with Indraprastha Gas Ltd. and Mahanagar Gas Ltd. outperforming the BSE Oil & Gas Index in the last six months. Mahanagar Gas listed on the stock exchanges on July 1. Climate Commitments Edelweiss Securities expects COP21 commitments adopted by 185 nations including India to also improve the prospects of city gas distributors. With widespread pollution across cities on one hand and COP21 commitments on the other, city gas companies are clearly poised for biggest gains. Edelweiss Securities Report At the 21st session of the Conference of the Parties in Paris last year, countries agreed to cut emissions in a bid to keep the global average increase in temperatures below 2 degree celsius. India has committed to generating at least 40 percent of its electricity from non-fossil fuels by 2030. The recent pollution control initiatives by the Delhi government also boosted demand. Indraprastha Gas, which gets all of its revenue from Delhi and the National Capital Region, saw its natural gas volumes grow by double digits in the last two quarters. The ‘Maharashtra City Taxi Scheme 2016’, which could make the use of liquefied petroleum gas or compressed natural gas mandatory for all taxis and radio cabs operating in the state, is expected to aid Mahanagar Gas, which runs gas distribution networks in Mumbai, Thane, and Raigad. The management told analysts in the earnings conference call that it expects the law to come into effect by February. The company has already signed gas supply agreements with Ola and Uber. The two taxi aggregators together have around 20,000 vehicles in Mumbai, and only 3,000-4,000 of them run on CNG, according to Edelweiss’ estimates. Mahanagar Gas will also experience a surge in volumes as new auto rickshaw permits get issued and more state-owned buses start using CNG. 15,000-17,000 additional auto permits in the pipeline implies bright volume prospects for MGL. Edelweiss Securities Report Virtual Monopolies: Above all, Indraprastha Gas and Mahanagar Gas have a virtual monopoly in their respective markets since the Petroleum and Natural Gas Regulatory Board allows five-year marketing exclusivity and 25-year network exclusivity to the winner of compressed natural gas networks. Even if the marketing exclusivity ends, new players will find it tough to break into the market, Ambit Capital said in a report to clients. It would be difficult for other players to get into city gas distribution given that building a compressed natural gas retailing network in a crowded city area and getting domestic allocations where the benefit proposition to the consumer is not quite robust. Ambit Capital Report Client Profile: Gujarat Gas Ltd., another city gas distributor, hasn’t seen the same demand growth due to its unfavourable sales mix. Indraprastha Gas and Mahanagar Gas have similar product profiles with compressed natural gas and pipelined natural gas accounting for 80-85 percent of sales, while Gujarat Gas caters more to industrial and commercial clients. In the second quarter, Gujarat Gas’ industrial gas volumes declined 12 percent. Unlike power and large industrial users where gas competes with coal/liquid-fuel, city distribution has unique advantages of convenience, competitive costs and regulatory support. Ambit Capital Report With pollution concerns on the rise, more industrial and commercial establishments are expected to shift to natural gas. That, in turn, will benefit not only Gujarat Gas but also Indraprastha Gas and Mahanagar Gas. “City gas distribution companies look like a good bet because it gets consumed on the CNG side and the PNG side as well, and the requirement will persist going forward,” Mayuresh Joshi, a fund manager at Angel Broking told BloombergQuint on the phone. “With the cost of gas coming down and new distribution centres opening, the longer run benefits still hold.” Phil Kessel Authentic Jersey