Petrol, diesel sales drop 17% in May on Covid-19 lockdowns
India’s petrol and diesel sales fell by about 17 per cent in May from a month ago as restrictions clamped to curb the world’s worst outbreak of coronavirus infections stifled demand. Sales of petrol — used in cars and motorcycles — fell to 1.79 million tonne in May, the lowest in a year, according to the preliminary data of state-owned fuel retailers. While the consumption was almost 13 per cent higher than demand in May 2020, it was 28 per cent lower than pre-Covid levels of 2.49 million tonne. India was under one of the world’s strictest lockdowns in May last year, which brought all mobility and economic activity to a grinding halt. This year, though the infection rate is much severe, restrictions are localised. Personal mobility is not as hampered as last year and more factories have remained open while cargo movement between states too hasn’t been as badly affected. Demand for diesel — the most used fuel in the country — fell to 4.89 million tonne in May 2021, down 17 per cent from the previous month and 30 per cent from May 2019. With airlines continuing to operate at less capacity, jet fuel (ATF) sales in May were 2,48,000 tonne, down 34 per cent over April 2021 and 61.3 per cent over May 2019. Jet fuel sales in May 2020 were 1,09,000 tonne. Sales volume of cooking gas LPG fell 6 per cent year-on-year to 2.16 million tonne in May 2021 but was 6 per cent higher than 2.03 million tonne sold in May 2019. LPG was the only fuel to have registered growth during the lockdown last year as the government gave free cylinders as part of the Covid-19 relief package. India’s new coronavirus cases have fallen from over 4 lakh to 1.27 lakh and deaths from the infection dropped to 2,795 from over 4,000 a few weeks back, according to health ministry data released on Tuesday. “We were near pre-Covid level in March 2021, but new restrictions due to the second Covid-19 wave have temporarily reduced demand for both personal mobility and industrial goods movement,” an industry official said. “Local fuel consumption will start to look up this month when second pandemic wave is expected to weaken.” Declining fuel sales reduced crude intake by refiners, reducing the operating run rate by 85-86 per cent.
Saudi Arabia committed to meet India’s crude oil requirement: Saudi envoy
Saudi Arabia, the world’s largest oil exporter, on Sunday said it is committed to meet India’s requirements of petroleum products, an affirmation that came in the wake of the country pitching for easing global output cuts to rein in surging oil prices. In an interview to PTI, Saudi ambassador Dr Saud bin Mohammed Al Sati also said that Saudi Arabia made investments worth $2.81 billion in India in 2020 and is looking at a greater momentum in bilateral economic ties in areas like petroleum, renewable energy, IT and artificial intelligence. “Saudi Arabia has remained committed to meeting the requirements of India from oil and petroleum products and our energy cooperation has been going very well. It has been further reinforced during the recent and ongoing communications between Prince Abdulaziz bin Salman Minister of Energy and his counterpart Minister Dharmendra Pradhan,” Al Sati said. His comments came in response to a question on Saudi Arabia’s position on India pressing for easing cuts in crude oil production by OPEC and OPEC Plus as high oil prices are hurting the consumption-led recovery of several countries like itself. The OPEC (Organisation of the Petroleum Exporting Countries) is an influential entity that plays a key role in policy formulations relating to crude production. The OPEC Plus comprises the OPEC countries, Russia and several other crude producers. Talking about his country’s Vision 2030, an ambitious programme aimed at moving the country’s economy away from its dependence on oil profits, Al Sati said it provides for expansion of economic engagement with India and other strategic partners. “The number of Indian companies investing and operating in the kingdom has been growing. In 2020, 44 new licences were issued for Indian investments. “Saudi Arabia also had the highest FDI increase to India in 2020 with investments worth $2.81 billion,” he said. “As we move to resume normal life and fully opening our economy in all sectors, we will be building on the progress achieved so far and there will be a greater momentum for our economic cooperation and mutual investments especially in the sector of renewables, IT, and artificial intelligence,” he said. The envoy said Saudi Arabia’s strategic partnership with India expands over diverse areas and health cooperation stands out as one of the most important aspects of the ties. “Health cooperation will continue as an important area of focus in our bilateral cooperation. In the wake of the pandemic and its economic, social and health impact, our cooperation has continued to grow,” he said. Al Sati said Saudi Arabia maintained the supply chains of goods and medical-related products uninterrupted notwithstanding the coronavirus pandemic, adding his country facilitated the supply of medical oxygen to various entities in India. “We will continue to extend all forms of possible support to India and its friendly people to overcome the current COVID-9 challenge. I am confident that India has the resolve and capacity to deal with the current challenge of COVID-19 and this crisis shall wane out shortly,” he said. Referring to the Vision 2030, Al Sati said Saudi Arabia has been diversifying its oil-driven economy under the programme as envisioned by its architect Crown Prince Salman. “During the State visit of Crown prince to India in 2019, Saudi Arabia agreed to align Vision 2030 and its 13 Vision Realisation Programmes with India’s initiatives of ‘Make in India’, ‘Start-Up India’, ‘Smart Cities’, and ‘Digital India’,” he said. In February 2019, Saudi Crown Prince Mohammed bin Salman announced that Saudi Arabia would invest over $100 billion in India in petrochemicals, refining, infrastructure, mining and manufacturing, agriculture and several other sectors. “In our endeavour to reform and achieve our Vision 2030 strategic goals, we have created immense opportunities and a conducive business environment for our strategic partners” he added. In the last five years, he said, Saudi Arabia’s non-oil revenues have increased by 222 percent while the maturity rate of digital government services increased from 60 percent to 81.3 percent and Saudi women’s participation in the workforce increased from 19.4 percent to 33.2 percent. He said the IMF’s projections painted a positive picture, estimating Saudi Arabia’s real GDP growth at 4.8 percent, the real non-oil GDP growth recovery at 3.6 percent, and the real oil GDP growth to reach 6.8 percent in 2022. As part of the commitment to combat climate change, he said, the kingdom has encouraged the concept of a circular carbon economy, adopted by the G20, and expanded its solar, hydrogen and ammonia projects. “Saudi Arabia hopes to obtain 50 percent of its electricity from renewables by 2030. This comes alongside the Saudi Green and Middle East Green initiatives, designed to boost vegetation, reduce carbon emissions, and combat pollution and land degradation,” Al Sati said. He said the last five years have witnessed tremendous changes in Saudi Arabia as the country has been going through a historic transformation. “Diverse reforms have been introduced in laws, regulations, and procedures, in cooperation with more than 50 government entities, and coordination with the private sector,” he said. “Saudi Arabia has streamlined and automated administrative procedures and data sharing among various entities, making it possible for investors and entrepreneurs to start their businesses electronically,” he added.
Oil prices stay firm as demand to outstrip supply in H2
Oil prices climbed in early Asian trade on Monday, underpinned by the bright outlook for fuel demand growth in the next quarter, while investors looked ahead to the OPEC+ meeting this week for supply guidance. Brent crude futures for August nudged up 7 cents, or 0.1 per cent, to $68.79 a barrel by 0038 GMT after settling at their highest in two years on Friday. U.S. West Texas Intermediate crude for July was at $66.45 a barrel, up 13 cents, or 0.2 per cent. Both contracts are on track for a second monthly gain as analysts expect oil demand growth to outstrip supply despite the possible return of Iranian crude and condensate exports. Iran has been in talks with world powers since April working on steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the 2015 nuclear pact. “We see demand outstripping supply in the order of 650,000 barrels per day and 950,000 bpd in Q3 and Q4 respectively,” ANZ analysts said, adding that this includes 500,000 bpd of increase in Iranian output. The Organization of the Petroleum Exporting Countries and their allies including Russia will meet on Tuesday. The group known as OPEC+ is expected to stay the course on its plans to gradually ease supply cuts until July. Separately, crude output in the United States soared 14.3 per cent in March, the Energy Information Administration reported on Friday, while Baker Hughes data showed oil and gas rigs rising for a 10th month in a row last week.
Indian consortium may get to remain invested in Iranian gas field
New Delhi, India may continue to pursue investment opportunity in the Farzad-B gas field in Iran, even though ONGC Videsh Ltd (OVL) lost the development rights of the block that it discovered over a decade ago to local firm Petropars Group, highly placed government sources told IANS. Reports from Iran indicate that months the after ejecting India from the ambitious $1.8 billion project, Tehrann has now brought in Petropars Group to develop the gas field in the Persian Gulf. But the sources said that this would not deter the Indian entity from pursuing energy assets in the country and remain invested in the project. In fact, they indicated that Iran may formally announce a partnership with the Indian firm once development work of the field picks up pace. Sources in the Oil Ministry said that Indian consortium including IndianOil, Oil India and OVL, which bagged the exploration contract for Farzad-B in 2002, may remained invested in the upstream project as equity partners with other local and international entities even without operatorship or development rights. They are in talks with Iranian authorities in this regard to formalise the arrangement that gets India a share in gas fields output, they said. If this option is permitted, it will allow the consortium to get their share of gas to India at applicable rates decided by Iran. Though the exploration contract signed by the Indian consortium expired in 2009, the sources said that a deal could be negotiated so that India has a presence in the field as equity investors. Early indications Iran also favour this arrangement, they said. Farzad-B, which was discovered by OVL in the Farsi block about 10 years ago, had an in-place gas reserve of 21.7 trillion cubic feet, of which 12.5 Tcf is believed to be recoverable. If India gets a share of this gas, it could reduce its dependence on expensive LNG. Iran had been dilly dallying over grant of development right of Farzad-B for few years now. Things had come to a standstill since the US imposed sanctions in 2018 on Iran with India also moving slowly on the matter. This pushed Iran into suggesting that India was not serious about investing the project and decided to offer operatorship of the gas block to a local company. The sources said that changes in geo-political scenario in the Covid-19 world, which suggests that Tehran may soon be out from US sanctions favour more active participation of India in Iranian energy assets. If Iran decides to offer equity holding in the project, Indian consortium claims would once again be considered. “There are two issues to Farzad-B project. Iran not giving development rights to OVL but an Indian consortium continues to have part ownership of the block and would get its share of profit whosoever develops the project,” the sources said. The OVL-led consortium have invested close to $100 million in the project. India and Iran were initially targeting concluding a deal on Farzad-B field development by November 2016 but later mutually agreed to push the timeline to February 2017. The deadline to wrap up negotiations was later targeted for September 2017. But, with deal stuck over pricing of gas. Sanctions delayed the process thereafter and despite visits of ministers from both sides no agreement could be reached. OVL pushed for the deal with a sweetened offer that included investment of close to $11 billion. But that also did not break the ice and the project remains in limbo.
PNGRB chairman interviews this week, Gurmeet Singh favourite
Interviews to select a new head of oil regulator PNGRB are slated to be held this week, with former IOC director-marketing Gurmeet Singh being considered the favourite. A Search Committee headed by V K Saraswat, Member (S&T), Niti Aayog, will interview shortlisted candidates on June 2 to select the new Chairman of Petroleum and Natural Gas Regulatory Board (PNGRB), two sources aware of the matter said. The panel — which also comprises secretaries to the ministries of oil, and commerce, secretary legal affairs and economic affairs secretary — will interview at least seven shortlisted candidates. Singh, who superannuated from Indian Oil Corporation (IOC) last month, is considered a favourite after his candidature was ‘endorsed’ by the Oil Secretary – who is also a member of the Search Committee, they said. While previously only those who have retired as chairman of public sector firms or senior bureaucrats were considered for the PNGRB top job, directors of PSUs were included in the selection universe by the Search Committee at its meeting on January 15. Such candidates, however, should have been affirmed by any member of the panel. Singh’s candidature was endorsed by the Oil Secretary, according to the minutes of the meeting. While the spokesperson of the oil ministry did not respond to emails sent for comments, an official said the Committee wanted more candidates to be included for consideration and so more names were sought. Since the panel is a search-cum-selection committee, it or its members could pick candidates with a good background for consideration. And going by this criteria, Singh was ‘endorsed’ by the oil secretary. Members of the committee have been asked to suggest more candidates with good standing, who can be interviewed. Other candidates shortlisted for the interview on June 2 include retired bureaucrats Avinash Kumar Srivastava and Ravi Kapoor, Subba Rao, Senior Economic Advisor in MEITY, former ONGC chairman Shashi Shanker and former ONGC director Sanjay Kumar Moitra. The post of Chairman, PNGRB, has been lying vacant since December 4, 2020, when Dinesh K Sarraf completed his three-year term. The Board, which comprises four members besides the chairman, is almost defunct with just one serving member. The Search Committee has selected former GAIL directors Gajendra Singh and A K Tiwari to fill posts of two members. Interviews to select member (legal) will also be held shortly, the sources said.