LPG subsidy, LNG imports, jet fuel, gas connections and many more – Demands from the oil and gas sector
Budget 2019 predictions: It’s time for Budget 2019! With barely a three days left, there are huge expectations from the upcoming Budget which will be most likely an interim one and presented by interim Finance Minister Piyush Goyal. Many speculations have hit headline, like what will be next big reforms announced by Prime Minister Narendra Modi’s government. This time major reforms are expected in the oil and gas sector from NDA government, considering 80% of India’s import depends on this segment. Many analysts are eyeing reforms in the form of LNG imports, LPG subsidy, jet fuel, GST regime and many more in the oil and gas sector. Firstly taking into consideration the LNG imports, they account 47% share in total consumption. Between April to November of FY19, consumption of natural gas has increased by 15% as against to the same period in the previous fiscal year. CARE says, “ The industry expects LNG customs duty to be waived off completely from the current 2.5%, to benefit domestic regasification terminals.” Next big reform is expected in the case of jet fuels and natural gas which are outside the umbrella of Goods and Services Tax (GST). It is only, LPG, kerosene and naphtha are which are under GST tax bracket. For this CARE said, “Bringing fuel products under the ambit of GST has been deliberated for long. The state and Centre, however, have not been able to build a consensus on revenue sharing.” Moving ahead, in regards to LPG subsidy, CARE says, “the industry expects the government to widen the fuel subsidy and include all cooking fuels such as piped natural gas and bio gas, a move to which will benefit all consumers besides making it attractive for consumers to switch to alternate cooking fuels.” In Budget 2018, the government had allotted Rs 249.32 billion as fuel subsidies where Rs 203.77 billion was earmarked as LPG subsidy and the remaining Rs 45.55 billion was classified as kerosene subsidy in oil and gas sector. Apart from this, CARE also believes that the government will have to increase the petroleum subsidy as they aim to provide LPG connections to all poor households under the Pradhan Mantri Ujjwala Yojana (PMUY). Launched since 2016, the PMUY scheme originally targeted giving LPG connections to mostly rural women members of below the poverty line (BPL) households. The list was later expanded to include all SC/ST households and forest dwellers among others. The scheme is now being extended to all poor households. Hence, whether the NDA government brings in ache din for the oil and gas sector will be keenly watched. “The total length of the two corridors of the Kanpur metro rail project is 32.38km and the completion cost, excluding the land cost and state taxes, is Rs 161.92 billion. The length of the Agra stretch of the metro, which will also have two corridors, is 30km and the completion cost is Rs 122.53 billion,” the report cited a senior official of the UP state urban development department.
India’s crude oil imports from Iran dropped 63% in December, 53% jump in shipments from Saudi Arabia
India’s crude oil imports from Iran dropped 63 per cent to 0.86 Million Tonne in December, the lowest recorded in calendar year 2018, fresh data sourced from Directorate General of Commerce Intelligence and Statistics (DGCIS) showed. India had imported 2.32 Million Tonne of Iranian crude in December 2017. Cumulatively, oil imports from Iran during the April-December 2018 period increased 18 per cent to 19.75 MT, as compared to 16.65 MT imported in the corresponding period a year ago. India’s crude oil imports from Iran have been declining since November after US’ secondary sanctions targeting Iran’s energy sector came in effect. Making good the restrictions on Iranian crude oil exports, India’s oil imports from Saudi Arabia, the largest producer of Organization of Petroleum Exporting Countries (OPEC), jumped 53 per cent 3.02 MT in December 2018. Cumulatively, India’s crude oil imports from Saudi Arabia in the April-December period jumped 13 per cent to 29.39 MT. Sanjiv Singh, Chairman of Indian Oil Corporation (IOC), India’s largest fuel retailer and one of the biggest domestic consumer of Iranian crude, earlier this month said the company is optimistic about getting another waiver from the US and complete halt of Iranian crude is a tough decision to make. India and Iran had on 2 November signed a bilateral agreement to settle oil trades through Indian government-owned UCO Bank in the Indian currency, which is not freely traded on international markets, Reuters reported. According to data sourced from DGCIS, most of the Iranian crude during April-December 2018 came through the Paradip Port which handled around 4.68 MT of Iranian crude during the period as compared to 1.91 MT handled in the corresponding period previous year. New Mangalore port handled 4.50 MT of Iranian crude during the April-December period as against 3.58 MT handled in the corresponding period previous year. Vadinar port handled 4.47 MT of Iranian crude during the period as compared to 5.35 MT handled in the nine months period previous year. Imports from other countries India’s crude oil imports from Iraq declined 3.20 per cent to 3.92 MT in December 2018 on a year-on-year basis. Iraq, one of largest producers of OPEC and the largest crude oil supplier to India in 2017-2018, maintained its position in the first nine months of the current financial year (2018-2019), supplying 34.38 MT of crude oil in the period. Iraq’s crude exports to India in the same period previous year stood at 32.28 MT. India’s oil imports from Nigeria also rose 20.53 per cent to 1.35 MT in December 2018. Crude oil imports from United Arab Emirates (UAE) in December 2018 increased 41.66 per cent to 1.87 MT. Imports from oil-rich Venezuela increased 13 per cent to 0.96 MT in December. Venezuela is one of the top five crude oil suppliers to India. However, the volume of crude sourced from the OPEC member has been erratic on the back of ongoing political and economic crisis as well as under-investment in the upstream sector which is impacting the country’s production. Cumulatively, India’s crude oil imports from Venezuela in the April-December 2018 period decreased 6.28 per cent to 13.42 MT from 14.32 MT imported in the corresponding period a year ago. India’s total crude oil import bill during April-December 2018 increased 40.6 per cent to $86.9 billion as compared to $61.8 billion recorded in the year ago period.
Croatia eyes tender for onshore gas and oil exploration in south
Croatia is preparing a tender for gas and oil exploration in the mountainous areas of central and southern Croatia, Energy and Environment Minister Tomislav Coric said on Tuesday. He did not specify any exact date, but said the tender for concessions should be ready soon. “The exploration works will take between five and seven years and then we will see how to proceed. I believe it is our duty to check what resources we have,” Coric told an energy conference. The exploration will take place in the Dinarides area which is a mountainous range covering a large part of the Balkans, including the areas of central and southern Croatia. “We will, of course, exclude the environmentally sensitive areas and the national parks. We’ve seen some positive signals in the energy community for this exploration move,” Coric added. So far Croatia has been granting concessions for exploration and exploitation of gas and oil in the northern, largely flat, areas of the country. Several years ago there was also a plan to kick off exploration activities in the Adriatic Sea, but it was dropped after protests by environmentalist groups which said such activities would threaten the biodiversity and tourist industry. Close to 20 percent of the Croatian economy is based on tourism almost entirely focused on the Adriatic coast. At the moment Croatia covers some 80 percent of its oil consumption and around 60 percent of its gas needs from imports.