CNG Maharashtra: MNGL comes under pressure to get land for CNG pumps
With nearly 3,000 new compressed natural gas-run vehicles added on city roads every month, authorities at Maharashtra Natural Gas Limited are concerned about meeting the growing demand. The state-owned gas company currently has 55 CNG stations in Pune. Speaking about the number of compressed natural gas (CNG) vehicles in the city, director-commercial for Maharashtra Natural Gas Ltd Santosh Sontakke said, “Currently, there are over 1.5 lakh CNG-run four-wheelers in the city. The number of CNG autorickshaws stands at approximately 50,000, while there are 200 CNG-powered two-wheelers. With 55 CNG stations, we are running at optimum capacity and just about meeting the demand for gas albeit with long waiting periods.” According to Sontakke, at least 25 new CNG stations are required in the city to keep up with the rising demand. “Right now, we are running at capacity but if the number of CNG-powered vehicles keeps rising at the same rate, lines at the existing CNG stations will only get longer. We need at least 80 CNG stations in the city to keep up with the demand in future,” he explained. Maharashtra: MNGL comes under pressure to get land for CNG pumps While the Pune Municipal Corporation (PMC) offered nine parcels of land to develop CNG stations, Sontakke said that most plots are not feasible. “Many aren’t feasible due to neighbouring residential areas or highly compact localities. In some cases, the land is disputed so we cannot establish a set-up there. We have repeatedly taken up the matter with the authorities and even the city Member of Parliament but to no avail,” he explained. The official further stated that MNGL has also approached the cantonment boards in the city but it is still awaiting a response. “For land in the cantonment area, we have also taken up the matter with the defence minister through the city MP,” he added. According to Sontakke, the CNG stations running at optimal capacities coupled with the long lines are also coming in the way of more conversions. “People do not want to wait in line to re-fuel and seeing the long lines at CNG stations, they are discouraged from switching to CNG. We urgently need to expand our network so that people do not have to waste hours in line for re-fuelling,” he added.
Fuel prices set to soar again, industry wants scrapping of daily revision
Petroleum dealers and bulk consumers such as truckers and bus operators have revived their demand to abolish daily price revision of motor fuels, two days after the Organisation of the Petroleum Marketing Countries (Opec) decided to cut down crude oil production globally. Opec’s Friday’s decision to reduce crude oil production by 1.2 million barrels per day is likely to burn a hole in the customers’ pocket again after a period of two months that saw prices of petrol and diesel decline steadily from their peak. The decision has left the Indian retail market on edge as it was just recovering from skyrocketing prices that hit businesses across sectors. “It is certain from Opec’s decision that the prices can never be stable and we want the Centre to do away with the daily price revision system,” KM Basave Gowda, president of Federation of Akhila Karnataka Petroleum Traders said, adding that the association has sent representations to both the Centre and the state government. M Prabhakar Reddy, chairman of All India Dealers Association, said while it is ideal to bring petrol and diesel under GST, if it is getting delayed, then the daily revision must be stopped till motor fuel is taxed under the new regime. “We’ve suggested to the Centre that price revision can be done once in 15 days till petrol and diesel are brought under GST,” Reddy said. As the crude oil prices in the global market started climbing up in the middle of 2018, fuel prices in India reached an all-time high on October 4. In Mumbai, petrol was sold at Rs 91. 25 a litre and diesel at Rs 80.10 while it was Rs 84.59 and Rs 76.45 in Bengaluru. With the crude oil prices dipping from $86 to $62 from October, the prices plummeted and reached Rs 71.14 (petrol) and Rs 65.47 (diesel) in Bengaluru on December 9. Now, due to the OPEC’s decision, the prices are expected to go up in the New Year. “We expect the price to increase somewhere between Rs 5 and Rs 10 as crude oil prices are expected to hover around $70 in the coming days,” said GV Krishna, independent director of Hindustan Petroleum Company Limited (HPCL). “It is up to the government to plan how it is going to cushion it,” he added. Demand for petrol, diesel under GST Admitting that the daily price revision creates complication in the wake of fast fluctuating prices, Vivek Mallya, independent director of Oil and Natural Gas Corporation, said the best possible solution would be to bring petrol and diesel under GST, which is a long-pending demand from all sectors. “If the process of taxing petroleum products under GST is getting delayed, then the best possible solution is to listen to the demand of the industry and defer the daily price revision,” said Mallya. While common people will also be affected, it is the truckers and bus operators who will bear the brunt as they find it difficult to recalibrate their fuel expenses on daily basis in the face of changing prices. “We will request the Centre and the state government to reduce their taxes, while it is not their in control to reduce the base price of fuel,” said GR Shanmugappa, president of Federation of Karnataka State Lorry Owners and Agents’ Association. “As a last resort, we’ll launch a protest.” Tax cut a temporary reprieve In the wake of spiralling prices, the state government on September 17 reduced sales tax on petrol and diesel by 11% and 16%, which made the motor fuels cheaper by Rs 2. The Centre too chipped in to reduce the excise duty by Rs 2.5 on October 4 when the prices peaked. While the move resulted in a marginal dent into the revenues of both the Centre and the state as the base price started falling from October 4, the governments now can make up for their loss with the prices set to rise again.
Australia grabs world’s biggest LNG exporter crown from Qatar in Nov
Australia overtook Qatar as the world’s largest exporter of liquefied natural gas (LNG) for the first time in November, data from Refinitiv Eikon showed on Monday. The surge in Australian exports follows the start up of a number of export projects in the country over the past three years, most recently the Ichthys project offshore its northern coast. In November, Australia loaded 6.5 million tonnes of LNG for exports while Qatar exported over 6.2 million tonnes, the data showed. “It may have come later and at higher cost than originally envisaged, but Australia has taken the crown,” said Saul Kavonic, energy analyst at Credit Suisse in Sydney. Australia will further cement its top position as the final new project in the pipeline, Royal Dutch Shell’s Prelude, comes online by next year, though Qatar will not stay idle, said Sanford Bernstein analyst Neil Beveridge. “Qatar, of course, will respond and we expect a new wave of projects to be launched which will see Qatar regain its position as the leading exporter by the early 2020s,” he added. Qatar plans to boost its LNG capacity by early 2024 to 110 million tonnes a year, up from its current production of 77 million tonnes a year, by adding a fourth LNG production line. Qatar, which also exports around 600,000 barrels per day of crude oil, said earlier this month it would leave the Organization of the Petroleum Exporting Countries (OPEC) to focus on gas. Wood Mackenzie analyst Nicholas Browne said the drop in Qatari LNG exports in November was due to maintenance, making Australia’s time at the top limited. “We are expecting this to be temporary and that Qatar will likely produce 6.5 million tonnes in December, meaning it will again be the largest exporter,” he said. “We expect Australia will regain the role of largest exporter from summer 2019, when Ichthys and Prelude have fully ramped up.” However, Australia’s hold on the top spot could be fairly short as LNG exports are being blamed for rising domestic gas prices, which has become a political issue in the country. “The reality is Australia will only keep this title for a few years before Qatar retakes the crown, and in the longer term it will likely be a U.S. versus Qatar story for top spot with Australia in third place,” said Credit Suisse’s Kavonic.
OPINION: Opec cut will give a fresh lease of life to oil prices
The much-awaited outcome on production cut from Opec countries finally came on December 7 as they agreed to reduce output by 1.2 million barrel per day for six months. This by all means is a shot in the arm for crude oil prices in international markets, which ran up by 5 per cent. Succeeding in the “most difficult” situation”, Saudi Arabia got other members of Opec and non-members led by Russia to agree to a production cut of 1.2 million barrels per day. As a result, the market saw on Friday the best weekly gain. WTI initially hit $54.22 after Iraqi Oil Minister Thamer Ghadhban announced a cut of 8,00,000 bpd by Opec and 4,00,000 bpd by the group’s allies over six months. Exemptions were granted to Opec’s most economically depressed members — Venezuela and Libya — as well as Iran, which is facing US sanctions on its oil exports. Despite the rebound, WTI still remained some 30 per cent lower than the four-year highs of nearly $77 per barrel hit in early October. Brent was off about 27 per cent from similar peaks achieved two months ago. Any price rebound from here on will not be straight-lined, but dependent on whether the producers in Friday’s deal do as pledged and not cheat by producing more. Opec also interestingly did not make public any country quotas this time for production, although Russia pledged to reduce between 2,28,000 and 2,30,000 bpd. Another major challenge to the market will be how US crude output and exports — which are not part of any Opec cuts — perform over the next six months. The United States is already the world’s largest oil driller and its output that is expected to reach 12 million bpd in 2019, well above Saudi and Russia, the second- and third-largest producers, respectively, with production of just less than 11 million barrels. Active US drilling rigs for oil fell by 10 to 877 this week, data showed, but analysts said the number could jump again as prices rally. The announcement of production cut by Opec came in the face of pressure from the President Donald Trump to keep crude oil prices lower to support global economic growth. We expect that current production cut will help oil prices show some strength from the current levels and now $50 for WTI and $60 for Brent will act major support in international markets. The prices are expected to test $56 and $67 again in international markets. Technical view on crude oil: Brent crude oil sharply fell from around $77 levels to $49.50 in a very short span. Prices have eroded their almost one year gain in just one and a half months. Looking at the technical chart, WTI is forming Doji candlestick pattern and also near its long term Fibonacci retracement. Both are positive signs for crude oil prices. Now, $49.50 acts as a major support for crude oil prices and is expected to test $56-57 levels in days to come. Any continuance above $56.50 will extend rally towards $60-61.50. Prices will show weakness only if it closes below $49.50. In that case, it could fall towards $47.50-46, but such chances are remote. Investors can buy and accumulate crude oil in the range of $51-52 with strict stop loss below $49.50 on a closing basis for the upside target of $56-57.
India’s Petronet looking for long-term deal to buy US LNG
Top Indian gas importer Petronet LNG is looking to sign a deal in a year’s time to buy at least 1 million tonnes of US natural gas annually for a period of up to 10 years, as it pushes to diversify its supply sources beyond the Middle East. As part of any deal, the firm could potentially take a stake in a US liquefied natural gas (LNG) project, said Petronet’s managing director, Prabhat Singh. “The US market is open compared to other markets where the state is (often) the controller of minerals,” Singh told Reuters late last week. “The US offers lots of opportunities and we would like to explore that properly and make a venture (there),” he said. Petronet currently runs a 15 million tonnes per annum (mtpa) liquefied natural gas (LNG) regasification site at Dahej in the western state of Gujarat and a 5 mtpa plant at Kochi in southern India. It has long-term deals to buy 10 mtpa of LNG, with 8.5 mtpa of that coming from Qatar’s RasGas. Singh said Petronet was in talks with various companies including Tellurian Inc about a potential US deal. Singh had said in November that Petronet and ONGC Videsh were jointly in talks to buy a stake in Tellurian’s proposed Driftwood project in Louisiana. “If the pricing is right then India has appetite for huge volumes,” he said last week. Natural gas accounts for about 6.5 percent of India’s overall energy needs, far lower than the global average. The government wants to lift that to 15 percent in the next few years. “The US market is so developed that niche service providers are available on a shoestring budget, which means less overheads,” Singh said. A glut of natural gas in the United States in the wake of the rapid development of shale fields there has kept benchmark US prices for LNG at almost half Asian levels. Meanwhile, Singh said Petronet was also in talks to invest in exploration and LNG projects in Qatar, as well as continuing to scout for opportunities in Bangladesh and Sri Lanka. Australia overtook Qatar as the world’s largest exporter of LNG for the first time in November, data from Refinitiv Eikon showed on Monday.