Top Indian refiner IOC to raise Barauni processing capacity by 50%
Indian Oil Corp, the country’s top refiner, will invest 137.79 billion rupees ($1.94 billion) to expand the capacity of its Barauni refinery in eastern Bihar state by 50% to 180,000 barrels per day by April 2023, the company said on Friday. The state-run company is raising its refining capacity to meet growing demand for petroleum products in the country. India has emerged as a bright spot for refined fuel demand. Refined fuel consumption – a proxy for oil demand – in the December quarter rose 2.6% from a year earlier. India’s oil demand growth is set to overtake China by mid-2020s, priming the country for more refinery investment but making it more vulnerable to supply disruption in the Middle East, the International Energy Agency (IEA) said earlier this month. Indian Oil Corp reported a threefold rise in third-quarter profit on Thursday, mainly due to inventory gains.
Govt outlays infrastructure investments of Rs 102 lakh crore in FY 2020-25
India needs to invest more than 1.4 trillion dollars (Rs 100 lakh) crore in infrastructure to achieve the goal of becoming a five trillion dollar economy by 2024-25, according to the Economic Survey 2019-20 tabled in Parliament on Friday. The survey emphasised that investment in infrastructure is necessary for growth. Power shortages, inadequate transport and poor connectivity affect overall growth performance. Since the provision of adequate infrastructure is essential for inclusive growth, India recently launched the National Infrastructure Pipeline (NIP) for 2020-2025. “The NIP is expected to enable well-prepared infrastructure projects that will create jobs, improve ease of living and provide equitable access for infrastructure for all thereby making growth more inclusive,” said the survey tabled by Finance Minister Nirmala Sitharaman. As per the NIP, the Centre and state governments are expected to have an equal share of funding of the projects ((39 per cent each) followed by the private sector (22 per cent). Projects worth Rs 42.7 lakh crore (42 per cent) are under implementation. Financing of the NIP will be a challenge but the survey hoped that a bouquet of well-prepared project will attract investments from the Centre, state governments, urban local government, banks, financial institutions, private equity funds and private investors. The survey gave an overview of sectoral developments relating to railways, road transport, civil aviation, shipping, telecom, petroleum and natural gas, power, mining, housing and urban infrastructure. Total investment in the roads and highways sector has gone up more than three times in five year period of 2014-15 to 2018-19. Indian Railways carried 120 crore tonnes of freight and 840 crore passengers, making it the world’s largest passenger carrier and fourth largest freight carrier. India has 136 commercially-managed airports by the Airport Authority of India and six under public private partnerships for operation, maintenance and development of airports. To ease the strain on existing airport capacities, 100 more airports are to be made operational by 2023-24. The survey said about 95 per cent of India’s trade by volume and 68 per cent in terms of value is transported by sea. The Ministry of Shipping is striving to improve operational efficiencies through mechanisation, digitisation and process simplification. In telecom, the government is implementing the Bharat Net programme in a phased manner for providing broadband connectivity to all the 2.5 lakh gram panchayats in the country. Major reforms have been undertaken by the Ministry of Petroleum and Natural Gas in exploration and licensing policy to enhance exploration activities, attract domestic and foreign investment and accelerate domestic production of oil and gas from existing fields. There has been a surge of reserves of crude oil in 2019. However, there is a need to augment refining capacity to meet the growing demand for petroleum fuels and petrochemicals. Constant efforts by the government to foster investments in the power sector has resulted in India improving its ranking to 76th position in Energy Transition Index by the World Economic Forum. The installed capacity has increased from 3.56 lakh megawatt in March 2019 to 3.65 lakh megawatt by October 31, 2019. India produces 95 minerals which include four hydrocarbon energy minerals, five atomic minerals, ten metallic, 21 non-metallic and 55 minor minerals. There has been a notable turnaround in mineral production because of policy reforms and production of major minerals. The construction sector accounts for 8.24 per cent of GDP which includes housing and employs about 12 per cent of the workforce. The Pradhan Mantri Awaas Yojana Urban (PMAY-U) was launched in June 2015. The survey said it is one of the largest housing schemes of the world covering entire urban India and is being implemented through four verticals. Besides, since the launch of the Smart City Mission in 100 cities, about 5,151 projects worth more than Rs 2 lakh crore are at various stages of implementation. A total of 1,290 projects worth Rs 22,569 crore have been completed and are operational.
Govt outlays infrastructure investments of Rs 102 lakh crore in FY 2020-25
India needs to invest more than 1.4 trillion dollars (Rs 100 lakh) crore in infrastructure to achieve the goal of becoming a five trillion dollar economy by 2024-25, according to the Economic Survey 2019-20 tabled in Parliament on Friday. The survey emphasised that investment in infrastructure is necessary for growth. Power shortages, inadequate transport and poor connectivity affect overall growth performance. Since the provision of adequate infrastructure is essential for inclusive growth, India recently launched the National Infrastructure Pipeline (NIP) for 2020-2025. “The NIP is expected to enable well-prepared infrastructure projects that will create jobs, improve ease of living and provide equitable access for infrastructure for all thereby making growth more inclusive,” said the survey tabled by Finance Minister Nirmala Sitharaman. As per the NIP, the Centre and state governments are expected to have an equal share of funding of the projects ((39 per cent each) followed by the private sector (22 per cent). Projects worth Rs 42.7 lakh crore (42 per cent) are under implementation. Financing of the NIP will be a challenge but the survey hoped that a bouquet of well-prepared project will attract investments from the Centre, state governments, urban local government, banks, financial institutions, private equity funds and private investors. The survey gave an overview of sectoral developments relating to railways, road transport, civil aviation, shipping, telecom, petroleum and natural gas, power, mining, housing and urban infrastructure. Total investment in the roads and highways sector has gone up more than three times in five year period of 2014-15 to 2018-19. Indian Railways carried 120 crore tonnes of freight and 840 crore passengers, making it the world’s largest passenger carrier and fourth largest freight carrier. India has 136 commercially-managed airports by the Airport Authority of India and six under public private partnerships for operation, maintenance and development of airports. To ease the strain on existing airport capacities, 100 more airports are to be made operational by 2023-24. The survey said about 95 per cent of India’s trade by volume and 68 per cent in terms of value is transported by sea. The Ministry of Shipping is striving to improve operational efficiencies through mechanisation, digitisation and process simplification. In telecom, the government is implementing the Bharat Net programme in a phased manner for providing broadband connectivity to all the 2.5 lakh gram panchayats in the country. Major reforms have been undertaken by the Ministry of Petroleum and Natural Gas in exploration and licensing policy to enhance exploration activities, attract domestic and foreign investment and accelerate domestic production of oil and gas from existing fields. There has been a surge of reserves of crude oil in 2019. However, there is a need to augment refining capacity to meet the growing demand for petroleum fuels and petrochemicals. Constant efforts by the government to foster investments in the power sector has resulted in India improving its ranking to 76th position in Energy Transition Index by the World Economic Forum. The installed capacity has increased from 3.56 lakh megawatt in March 2019 to 3.65 lakh megawatt by October 31, 2019. India produces 95 minerals which include four hydrocarbon energy minerals, five atomic minerals, ten metallic, 21 non-metallic and 55 minor minerals. There has been a notable turnaround in mineral production because of policy reforms and production of major minerals. The construction sector accounts for 8.24 per cent of GDP which includes housing and employs about 12 per cent of the workforce. The Pradhan Mantri Awaas Yojana Urban (PMAY-U) was launched in June 2015. The survey said it is one of the largest housing schemes of the world covering entire urban India and is being implemented through four verticals. Besides, since the launch of the Smart City Mission in 100 cities, about 5,151 projects worth more than Rs 2 lakh crore are at various stages of implementation. A total of 1,290 projects worth Rs 22,569 crore have been completed and are operational.
Transport Policy in a month; Focus will be on innovation, reforms in public transport: Gadkari
The government is planning to come out with a new transport policy, that will focus on innovation and reforms in the country’s public transport system and will also have provisions for financial support for such initiatives, Union Minister Nitin Gadkari said on Thursday. The minister also urged State Transport Corporations to switch to alternative fuels like CNG, LNG and bio-fuel like ethanol to save costs and reduce India’s dependence on crude import which amounts to a massive Rs 7 lakh crore per annum. “Within a month, a new transport policy will be declared. We will promote new innovations and research and there will be provisions for financial support to players who want to bring new technology and innovation,” Gadkari said at International Conference and Exhibition on Public Transport Innovation 2020 at Manekshaw Centre here. The Road Transport, Highways and MSME Minister said, the policy is being designed in such a fashion that it will focus on innovation and reforms and all obstacles on the way have already been removed. “All clearances will be there for those showing innovation and research,” he said and called upon State Road Transport Corporations to switch to alternative fuels for change in cost dynamics and promoting pollution free transport. “Fuel change results in cost economics change,” the minister said adding diesel buses can be converted into CNG-powered buses with a cost of barely Rs 3 lakh. “CNG can be used for school buses and city buses while LNG can be used for long-route buses. Conversion of diesel buses into LNG costs Rs 8 lakh,” he said. He further said that “corporations should use alternative fuel instead of diesel. Using LNG will result in savings to the tune of 60 per cent. The life of diesel buses is 9 years and CNG buses is 15 years. Public transport buses in India need to be developed on the pattern of European countries.” He also urged them to come out with electric buses to reduce cost saying that manufactures were working fast in this direction. “I have not been able to deliver much in public transport space. The condition of the state transport corporations is not good and is specially in a very bad shape in rural areas. … Fresh capital is needed here. Foreign agency funds among others should be sought. …There is need for correction,” the Minister said. He also called upon auto-makers to be “quality centric and not cost centric” saying this was one of the reasons people were going for imported buses and cars and added that people are ready to shell out more for quality services. The minister said that 22 green express highways are on the anvil including Rs one lakh crore Delhi-Mumbai express highway which will be completed in three years time. He said work on seven out of 22 projects have already started and added that a stretch of it will be developed as the country’s first electric highway on pilot basis. “We are acquiring land on the sides of all new express highways. About 2,000 petrol pumps and gas stations will come up on these and revenue generated will come into the kitty of National Highways Authority of India. We will have Rs 2,000 crore income from these,” he said. Asserting that there is no dearth of funds, the minister said that post FASTag system on national highways for electronic toll collection, the revenue per day has swelled to Rs 87 crore, from Rs 68 crore. Once the system is implemented totally, NHAI expects Rs 100 crore toll income per day and annual income will swell to Rs 10,000 crore, he said and added that NHAI’s annual income from various sources was estimated at Rs 40,000 crore this year which will swell to Rs 1 Lakh crore in coming years. The minister said that his Ministries in the previous tenure had seen award of work worth Rs 17 lakh crore and this tenure will see award of Rs 15 lakh crore in the highways sector.
Convert diesel buses to run on CNG & LNG; cut operational costs, Gadkari tells STCs
Union road transport minister Nitin Gadkari on Thursday suggested state transport corporations convert their buses to run on CNG in place of diesel to reduce the cost of operation and also to put an end to the malpractice of diversion of diesel to the black market. “Only change of fuel and automation of ticketing system will reduce your loss and you will be able to deliver better and efficient service without even increasing the fare. There can’t be any diversion of CNG and LNG. Diesel ki chori puri tarah se ruk jayega (You will put an end to the diversion of diesel),” the minister said while addressing a conference organised by Association of State Road Transport Undertakings and industry body, FICCI. He also said a new national transport policy will be out in the next one month and it will focus on innovation and reforms in the country’s public transport system. It will also have provisions for financial support for such initiatives by the state transport undertakings, including sourcing finance from foreign agencies subject to their willingness to undergo a major transformation. “We will financially support innovations and research in the sector. I will also ask the automobile manufacturers to bring in new technologies, like the electric mobility card used for a bus ride. We can save much both in diesel and tickets,” he said. The minister said fuel change results in cost economics change and diesel buses can be converted into CNG-powered buses with a cost of barely Rs 3 lakh. “CNG can be used for city and school buses while LNG can be used for long-route buses. Conversion of diesel buses into LNG costs Rs 8 lakh,” he said.
Indian Oil in talks with Rosneft for sourcing crude oil: Chairman Sanjiv Singh
Indian Oil Corporation (IOC), the country’s largest fuel retailer is in talks with Russian state-owned oil giant Rosneft for sourcing crude oil under a term contract, Chairman Sanjiv Singh told reporters at a press conference here. Singh, on the occasion of the company’s third quarter financial results, shared information on a host of issues including price premium for BS VI fuel, impact of IMO 2020, and the status of the mega west coast refinery. Edited Excerpts.. Q. Is the company in talks with Rosneft for sourcing crude oil? Ans. We have been exploring this possibility seriously for quite some time and we are close to finalising our deal with Russia, there are certain commercial terms which are being finalized, it should happen. We cannot disclose the quantity and other details as we are still in talks with Rosneft. Q. Could you provide an update on the mega west coast refinery? Was the MoU signed with Saudi Aramco for the west coast refinery binding for Aramco? Originally the site was indicated to be in ratnagiri district, subsequently Raigad was being looked at. An updated configuration study has been carried out keeping in mind the new location. Presently the cost estimates of shortlisted configurations are being worked out. The issue of land is yet to be firmed up, after the new state government was formed talks are again underway on land location. It was not to that extent binding, as they have committed to the investment approval stage initially, because no such final binding commitment can be made by any stakeholder until we have the finality with respect to the overall cost, configuration and land. Q. Do you plan to sell BS VI fuel at a premium? Will the hike be staggered? Ans. We are under the process of working out the implications on pricing. There will be a quality premium as far as BS VI is concerned. The premium will be applicable only when the BS VI fuel starts being dispensed at retail outlets. I do not think that the premium will be very large to require staggering. As there is no exact product like BS VI being traded internationally, prices will have to be calculated indirectly based on the closest available international product. Q. What has been the impact of IMO 2020? Have shipping costs increased since the maritime fuel specification came into force? Ans. The impact of IMO 2020 has been more on bunker fuel trade rather than overall shipping cost, as there are many other factors impacting shipping costs today. IOC was first to supply IMO 2020 bunker oil in India in October. We supplied around 0.4 MT of bunker fuel and this year we will supply around 1.2 MT. We are able to place the product in all major ports of the country. Gujarat and Haldia refineries are producing IMO 2020 bunker fuel. As IMO compliant bunker fuel is more expensive than the conventional fuel there is a marginal impact on shipping cost also. Q. What was the trend of overall petroleum demand in the third quarter? Ans. Diesel demand is still positive today if we look at the first nine months of the current fiscal as compared to last year. It has picked up especially in the last two months, not too high though. Petrol is close to 8 per cent, it had always been robust. Auto sales have also fared better during the third quarter as compared to the second quarter. We are seeing positive growth in almost all the products now. Q. Most petroleum products do not fall under the ambit of GST, what kind of costs had the company had to bear in the form of stranded taxes as input credit cannot be availed on these products? Ans. On the revenue account it is close to Rs 2,000 crore per year annually. Q. How has been the capacity utilisation of Ennore LNG terminal? Ans. We are now pricessing 2.6-2.7 MMSCMD from Ennore terminal. We have already commissioned the first phase of the pipeline from Ennore to Manali. By the end of this year we should be able to connect Bangalore on one side and Trichy, Madurai on the other side. After that the capacity utilisation of the terminal will quickly ramp-up.
First CNG private bus set to roll out in Kochi
Private bus operators in the city are gearing up to introduce buses running on Compressed Natural Gas (CNG) . They will soon bring in 400 such buses to the city. The first bus, which was converted to CNG in New Delhi has already arrived and is expected to begin plying on city roads in 10-15 days. Tripunithura-based Thiru Kochi Motor Vehicle Owners Credit Cooperative Society Ltd will fund the bus operators for launching 300 of these 400 buses while Kochi Metropolitan Transport Cooperative Society Ltd (KMTC) will operate another 100 buses. It is KMTC which has brought the first CNG bus to the city, and it expects to begin its operations a fortnight. At present, the bus is maintained as a demo vehicle. First CNG private bus set to roll out in Kochi “All relevant documents will be submitted before RTO to change the fuel from diesel to CNG in the RC book. Once the process is completed, the bus can ply on city roads. We have obtained all other approvals required for operating the bus,” said TK Raju, president of KMTC. The bus was brought to Kochi from Delhi via Indore, Pune and Bengaluru. It underwent testing and has obtained certification from International Centre for Automotive Technology (ICAT). Sabu T John, president of Thiru Kochi Motor Vehicle Owners Credit Cooperative Society, said the society worked in association with the bus operators’ forum. They fund individual bus operators to convert diesel buses to CNG buses, which will be ply in Ernakulam district. “The society will sanction loans based on applications the society receives from individual bus operators. It costs Rs 3-3.5 lakh for converting a diesel-run bus to a CNG-fuelled one. It is expected that within a month’s time we will be able to help bus operators launch 300 CNG buses,” said John. He also said the Thiru Kochi Motor Vehicle Owners Credit Cooperative Society is keen to associate with the bus operators’ forum as they are quick to get involved when there are issues related to non-payment of dues by individual bus operators. “The society hardly faces issues related to repayment and non-performing assets,” added John. However, on a question regarding the ticket fares in CNG buses, the bus operators maintained that the CNG buses will also charge the same rates charged by diesel buses.“CNG will help bus operators, who are going through a tough time, make profit. Even autorickshaws and other public transport vehicles running on CNG, charge the same rates charged by diesel vehicles,” he said.