Polls ignite petrol, diesel sales
Demand for petrol and diesel jumped while that for bitumen slowed during April-May when an intense election campaign boosted sales of transportation fuel but slowed road construction work. Oil demand shrank 0.3% in the first two months of the current fiscal year on lower consumption of polluting pet coke, fuel oil, kerosene and bitumen. India consumed 36.3 million metric tonnes (mmt) of petroleum products in April-May, compared to 36.4 mmt in the year-ago period. The country produced 43 mmt of petroleum products in April-May, 1.3% higher than a year ago. Sale of petrol and diesel jumped 10.7% and 2.7%, respectively, on the increased use of vehicles in election campaigning. But a decline in sales of vehicles hurt demand for diesel and to a lesser extent that of petrol. Car buyers seem to prefer petrol-driven cars as diesel deregulation has made diesel-driven cars less attractive these days. “Elections in various states leading to sealing of borders and grant of special leave to drivers for casting votes resulted in low movement of heavy vehicular traffic and thereby negatively affected diesel sales,” the oil ministry’s Petroleum Planning and Analysis Cell (PPAC) said in its monthly report. “No new infrastructure related works were initiated due to model code of conduct,” it further said. This hurt sale of diesel as well as that of bitumen, mainly used in building roads. Demand for naphtha shrank due to lower demand by the petrochemical and fertilizer industry. A ban on fuel oil in Delhi, Uttar Pradesh, Rajasthan and Haryana cut its demand, according to PPAC. A ban on the use of petcoke as fuel has sharply cut its consumption. Its use as feedstock in some industries such as cement, lime kiln and calcium carbide and gasification industries is still allowed. Indian refiners processed 21.6 mmt of crude oil in May, 2.7% lower than in the year-ago period, due to shutdowns at some refineries. Mangalore Refinery and Petrochemical processed 0.7 mmt of crude in May, down from 1.2 mmt a year earlier as freshwater shortage hit its operations. Indian Oil’s Koyali refinery and Hindustan Petroleum’s Mumbai refinery also performed below capacity.
Texas court rejects challenge to $2 bn Kinder Morgan gas pipeline
Kinder Morgan Inc can begin work on a $2 billion natural gas pipeline without having the Texas energy regulator approve its proposed route, a state judge ruled on Tuesday. The decision removes a challenge to the state’s licensing process that lets gas pipeline companies determine their own route and acquire land without a landowner’s consent. Texas is in the midst of a pipeline-construction boom with multibillion-dollar projects under way to bring shale oil and gas to market. A Travis County District court ruled the Texas Railroad Commission, the state’s oil and gas regulator, is not required to set standards for routing the pipelines or private land-takings, Judge Lora Livingston wrote on Tuesday. The state allows gas pipeline operators that qualify as utilities to use eminent domain to take land for the public good. “The court finds no authority for the proposition that the legislature has granted authority to the Commission to oversee the rights granted,” she wrote. She also granted Kinder Morgan’s request to dismiss it from the suit. The ruling was in response to a suit brought by a group that included Texas landowners and Hays County, Texas, that said the oil and gas regulator failed to seek public input or properly supervise the routing of Kinder Morgan’s Permian Highway Pipeline, which will carry 2 billion cubic feet per day of natural gas roughly 400 miles from West Texas to the U.S. Gulf Coast. Kinder Morgan had asked the court to throw out the landowners’ lawsuit, arguing it was up to the state legislature, not the court, change the pipeline permitting process. “The court’s finding validates the process established in Texas for the development of natural gas utility projects,” Tom Martin, president of Natural Gas Pipelines for Kinder Morgan, said in a statement on Tuesday, applauding the decision. U.S. shale gas production in July is projected to hit a record 81.4 billion cubic feet per day, which would be an 18th consecutive monthly increase. Shale oil could hit 8.52 million barrels per day that same month, according to the U.S. Energy Information Administration. Plaintiffs in the case argued that the pipeline will cross “sensitive environmental features in Central Texas,” such as endangered species habitats, sites of historical significance and residential subdivisions, according to a filing. A spokeswoman for the Railroad Commission of Texas declined to comment. Representatives for the plaintiffs did not immediately respond to a request for comment.
Gujarat High Court upholds rise in gas transmission charges
The Gujarat high court has lifted its stay on the Petroleum and Natural Gas Regulatory Board’s decision to hike gas transmission charges and ordered Torrent Power Ltd to pay the charges accordingly since 2012. A part payment was made by the power company, but with the revision of gas transmission tariff in December 2018, the HC stayed the recovery by the state owned Gujarat State Petronet Ltd (GSPL) as well as payment of increased rate for gas transportation. With the interim order by the HC upholding the Board’s decision to raise transmission charge to Rs 34 per Million British Thermal Units (MMBTU), the GSPL can recover the pending amount from Torrent and levy increased charges. GSPL’s advocate Aspi Kapadia said that the power company may pass over the burden to end consumer by raising electricity charges, but it will first have to obtain mandatory permission from the Gujarat Electricity Regulatory Commission to increase power tariff for consumers, though there could be a marginal rise in tariff. The HC has also lifted a stay on the Board’s tariff order with regard to South Gujarat Small Gas Consumers Association, which draws gas from GAIL (India) Ltd. Torrent has challenged the Board’s decision to increase gas transportation charges through its December 2018 tariff order by contending that the Board cannot raise charges at its whims, but this exercise can be done only through regulations.