Punjab slashes VAT on natural gas
The Punjab government on Tuesday slashed value added tax on natural gas to 3.3 per cent from from 14.3 per cent earlier to encourage industries to shift to the eco-friendly fuel. However, the VAT on compressed natural gas, used mainly as auto fuel, will remain at 14.3 per cent, an official statement said here. A decision to this effect was taken by the Punjab cabinet which met here under Chief Minister Amarinder Singh. This was for the first time that the Punjab cabinet meeting was held outside Chandigarh. The chief minister said the move would help cut down on industrial pollution in the state. The major consumer of gas is National Fertilisers Limited (NFL), which uses the gas at its plants at Bathinda and Nangal. Natural Gas is also consumed in very small quantity by select industries and the transport sector. Before March 2015, the VAT rate on natural gas was 6.05 per cent. From March 2015 onwards, it was increased from 6.05 per cent to 14.3 per cent. Due to increase in VAT rate, NFL started interstate billing of natural gas, due to which VAT collection on natural gas decreased. The VAT collection on natural gas from the years 2014-15 to 2018-19 came down considerably – from Rs 105.77 crore to Rs 5.67 crore, which had further shown a steep decline to Rs 1.84 crore till June 2019, during financial year 2019-20. The special meeting of the cabinet was convened here to review the progress of various ongoing projects in the historic city of Sultanpur Lodhi. It also cleared a proposal for declaring Sultanpur Lodhi-Kapurthala-Kartarpur-Beas-Batala (including Batala byepass)-Dera Baba Nanak as ‘Sri Guru Nanak Dev Ji Marg’.
Indian Oil to invest Rs 2,282 crore to set-up second R&D centre in Faridabad
Indian Oil Corporation (IOC), the country’s largest fuel retailer, s planning to open its second Research and Development (R&D) facility adjacent to an existing facility in Faridabad, Haryana, at a cost of Rs 2,282 crore. The proposed facility — to be called IndianOil Technology Development and Deployment Centre — will be spread across 59.32 acres of land in Industrial Model Town in Faridabad, the company said in an application to the environment ministry. It will house facilities which will research on alternative & renewable energy, industrial bio-technology, nanotechnology, refining technology, petrochemicals, applied metallurgy, pipeline research, catalytic interventions for clean energy processes and carbon nanotube & batteries. IOC’s R&D vertical employs over 400 scientists and the completion of the second campus would take the strength to 1,000 scientists, according to an official spokesperson. The project is expected to be completed in 36 months from the date of receiving Environment Clearance (EC). “The available space in the present campus has become limited for any further expansion. The new campus is being envisioned as a next generation technology development and deployment centre and has been named accordingly. The physical possession of the land has been completed and boundary wall for securing the premises is nearing completion,” the company said. R&D initiatives helped Indian Oil save around Rs 440 crore annually since 2014-2015, the firm said in its annual report for last financial year. Also, it has realized Rs 1,576 crore every year in refinery margins from indigenously developed technologies. IOC has so far filed more than 1,000 patents. Its Intellectual Property portfolio currently comprises 794 active patents. Of these, 542 patents were granted abroad and 252 in India.
Goldman Sachs cuts 2019 oil demand growth forecast to 1 million bpd
Goldman Sachs has lowered its forecast on 2019 oil demand growth, citing reduced demand from India, Japan, other non-OECD Asian regions, the Middle East and Latin America. The Wall Street bank revised its forecast down to 1 million barrels per day (bpd), from 1.1 million bpd but left its 2020 demand growth estimate broadly unchanged at 1.4 million bpd. However, it stuck to its 2020 price forecast for Brent crude at $60 a barrel, flagging the willingness of the Organization of the Petroleum Exporting Countries (OPEC) to sacrifice market share. “Our oil supply-demand outlook for 2020 calls for additional OPEC production cuts to keep inventories near normal,” Goldman analysts wrote in a note dated Sept. 9. “We continue to expect OPEC will sacrifice market share in line with leadership commentary at its June meeting, which we believe will lead to Brent prices of around $60/bbl.” Crude oil prices have shed nearly 20% from 2019 highs hit in April, partly because of an escalating trade war between the United States and China, which is expected to hurt the global economy and, in turn, demand for oil. Other banks, including Morgan Stanley and Barclays, have also flagged risks to oil demand as a result of economic uncertainties. Morgan Stanley last month lowered its oil price and demand forecasts for the rest of the year, citing a weaker economic outlook, faltering demand and higher shale oil output.
Oil demand to peak in three years, says energy adviser DNV GL
Global oil demand will peak in three years, plateau until around 2030 and then decline sharply, energy adviser DNV GL said in one of the most aggressive forecasts yet for peak oil. Most oil companies expect demand to peak between the late 2020s and the 2040s. The International Energy Agency (IEA), which advises Western economies on energy policy, does not expect a peak before 2040, with rising petrochemicals and aviation demand more than offsetting declining oil demand for road transportation. Wednesday’s annual report from DNV GL, which operates in more than 100 countries and advises both oil and renewable energy companies, would appear to be at odds with ongoing investment in developing new oil and gas fields. “The main reason for forecasting peak oil demand in the early 2020s is our strong belief in the uptake of electric vehicles, as well as a less bullish belief in the growth of petrochemicals,” Sverre Alvik, head of DNV GL’s Energy Transition Outlook (ETO), said in an email to Reuters. While DNV GL’s latest forecast shows oil demand peaking in 2022, one year sooner than it estimated last year, the difference is marginal and demand is expected to remain relatively flat over the 2020-2028 period, Alvik added. DNG GL expects electric vehicles to reach 50% of global new car sales in 2032, compared with last year’s forecast of the mid-2030s. By the middle of the century 73% of the global passenger car fleet will be electric-powered, up from 2.5% today, the company estimates. In Norway, where the DNV GL has its headquarters, more than 40% of all new cars sold in the first eight months of this year were electric — the highest proportion in the world. The government wants this to reach 100% by 2025. Demand for natural gas, which oil companies say could serve as a bridge in the global transition from fossil fuels to renewable energy, is seen surpassing oil demand in 2026 and plateauing in 2033, DNV GL said. Meanwhile, electricity’s share of the total energy mix is predicted to double by mid-century to 40% of today’s levels, with solar and wind generation accounting for two thirds of electricity output. Annual power grid spending is forecast to more than double to $1.7 trillion to connect thousands of new solar and wind farms and millions of electric vehicles. Meanwhile, upstream fossil fuel investment as a proportion of total energy expenditure is seen dropping to 38% from 68%, DNV GL said.
Gujarat: Multiple bids for GSPC’s blocks
Gujarat State Petroleum Corp’s bidding process for the sale of its 12 onshore hydrocarbon blocks was completed with the participation of at least half-a-dozen private companies. But its hopes of attracting central PSUs were washed away. This despite repeated extensions given by GSPC over the past few months. The bid submission deadline was extended four times at the behest of public sector oil companies. “We have successfully completed the bidding process. We will shortlist the winners soon,” said a government official. The participants have submitted multiple bids for the blocks. “Billionaire Dilip Shanghvi’s Sun Petro, Gujarat Natural Resources (GNRL), and Hindustan Oil Exploration Company (HOEC), among others, have each bid for four to five blocks,” the official said. HOEC recently decided to buy the Indian assets of Hardy Oil and Gas. On March 1, Gujarat Energy Research and Management Institute (GERMI), GSPC’s energy research arm, floated a tender to farm out 2 operating and 10 non-operating exploration and production fields. Gujarat State Petroleum Corp is the operator in Unawa and Miroli blocks. Of the 10 remaining blocks, five are operated by ONGC, three by GNRL, and one each by Sun Petro and Australian oil explorer Oilex. The bidding deadline was first extended on April 15 to May 15 after oil PSUs said it clashed with the deadline of the central government’s hydrocarbon block/field auctioning under Open Acreage Licensing Policy (OALP). Then it was extended to June 17 after the PSUs said that it again clashed with the OLAP deadline. “August 31 was the final call for all potential participants,” said a government official. None of the Central PSUs including Oil and Natural Gas Corp Ltd, GAIL (India) Ltd, Hindustan Petroleum Corp Ltd (HPCL), or Bharat Petroleum Corp Ltd (BPCL) bid for the GSPC blocks, he added. This is not the first time that Gujarat State Petroleum Corp has tried to sell off its stake in its exploration and production blocks. In July 2016, it had unsuccessfully attempted to sell its stake in 20 blocks. GSPC holds participating interest in 21 onshore and offshore exploration and production blocks/fields. Gujarat state run Gujarat State Petroleum Corp recently completed its three-year financial restructuring process. GSPC, whose debts had wiped off its net worth, has now restructured its debt to manageable levels.