Rising fuel prices eating into health spends: SBI report
A spike in fuel prices, which are near record highs, is not just impacting the inflation number but may be forcing consumers to cut nondiscretionary spending, including on health, as it eats into their consumption expenditure, a report by the State Bank of India’s research wing has said. “Our analysis of SBI card spends indicates that spend on non-discretionary health expenditure has been substantially reduced to accommodate increased expenditure on fuel. In fact, such spending has more than crowded out the spending on other non-discretionary items, like grocery and utility services to such an extent that the demand for such products has significantly declined. The share of nondiscretionary spend on items like fuel has jumped to 75% in June, 2021 from 62% in March, 2021,” it said. Citing the data, the agency argued that there was an urgent need to lower fuel prices through tax rationalisation. Rising fuel prices eating into health spends: SBI report While the governments, at the Centre and in states, have been mopping up revenue through high excise and VAT on petrol and diesel, economists have now started suggesting a reduction in levies. A recent report by CARE Ratings had suggested that petrol in India, which costs over Rs 100 a litre in many parts of the country, was dearer than BRICS, Indonesia, Thailand and the US, among others.
MGL again hikes prices of CNG, domestic PNG
For the second time in six months, the Mahanagar Gas Ltd on Tuesday announced hike in prices of Compressed Natural Gas and Domestic Piped Natural Gas for Mumbai and surrounding areas, with effect from midnight July 13-14, officials said. The rate of CNG – used in over 800,000 vehicles – has been hiked by Rs 2.58/kg, taking it up to Rs 51.98/kg, raising fresh fears of a corresponding increase in the fares for public transport vehicles. The price of Domestic PNG has been increased by Rs.0.55/Standard Cubic Metre and the new rates will be Rs 30.40/SCM in Slab 1 and Rs 36/SCM in Slab 2, for the 800,000-plus customers in the Mumbai Metropolitan Region region. After the last hike on February 8, the MGL’s new rates came as people in Mumbai reel under steep petrol prices of over Rs 105/litre and diesel prices hovering around Rs 100/litre. However, the MGL said that despite the fresh revision in prices of CNG – to offset operational costs and increase in gas pipeline transportation costs, it is around 67 per cent and 47 per cent cheaper than petrol and diesel, respectively. Likewise, the price of Domestic PNG is around 35 percent cheaper than the Domestic Liquified Petroleum Gas, besides additional benefits of convenience, reliability, safety and eco-friendliness, said the spokesperson.
Britain to ban all new diesel and petrol heavy goods vehicles from 2040
Britain will ban the sale of new petrol and diesel heavy good vehicles from 2040 as part of a broader package of green initiatives aimed at achieving net zero emissions from all forms of transport ten years later. Prime Minister Boris Johnson’s government is seeking to elevate Britain’s environmental credentials as he prepares to hold the United Nations’ Climate Change Conference, known as COP26, in Scotland later this year. The government said that it would ban the sale of smaller diesel trucks from 2035, and larger ones weighing more than 26 tonnes from 2040, or earlier if feasible. It also set out plans to create a net zero rail network by 2050 and ensure net zero domestic aviation emissions by 2040. “Decarbonisation is not just some technocratic process. It’s about how we make sure that transport shapes quality of life and the economy in ways that are good,” said Transport Secretary Grant Shapps. “It’s not about stopping people doing things: it’s about doing the same things differently.” As world powers try to slash carbon emissions by scrapping the fossil-fuel guzzling internal combustion engine, Britain has already pledged to ban the sale of new diesel and petrol cars from 2030. On aviation, the government said it was launching a consultation to achieve a net zero emissions target by 2050, with “an action plan for how it can be achieved – ensuring everyone can continue to fly for holidays, visits to family and business without contributing to climate change.”
Directorate General of Hydrocarbons overhauls oilfield approval processes, cuts down paperwork
In a major overhaul, DGH has made it easier for firms to explore and produce oil and gas in the country by limiting the requirement of statutory approvals to only extension of contracts, sale of stake and annual accounts while allowing self-certification and deemed approval for the rest. The Directorate General of Hydrocarbons (DGH), the government’s technical arm overseeing upstream oil and gas production, said procedures and processes for oil and gas blocks awarded under nine bids round of New Exploration Licensing Policy (NELP) and pre-NELP blocks are being simplified and standardised. While state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) produce two-third of India’s oil and gas from blocks or areas given to them on a nomination basis, the remaining output is from pre-NELP and NELP blocks. The pre-NELP blocks include Panna/Mukta and Taoil and gas fields in western offshore and Ravva field in the KG basin. But the biggest of oil and gas discoveries outside of the nomination acreage have happened in the blocks awarded under NELP since 2000. These include Reliance Industries Ltd’s eastern offshore KG-D6 block and NEC-25. ONGC too has significant finds in NELP blocks. “Ease of doing business is one of the key focus areas of the government in Exploration and Production (E&P) sector with the objective to increase investment and production. Simplification and standardisation of procedures and processes make the system transparent and efficient,” DGH said an order dated July 12. DGH undertook a review of processes of various approvals and submission of documents under Production Sharing Contracts (PSC) for NELP and pre-NELP blocks. As many as 37 processes and procedures were required to be followed by a firm exploring oil and gas in a block awarded under NELP or pre-NELP rounds. These have now been cut to just 18. Self-certification has been allowed in half of them, including for declaring a discovery as commercially viable as well as on requirement of submission of quarterly reports, insurance and indemnity and bank guarantees. No approval will be needed for any of these processes, DGH said. DGH has allowed deemed approval on expiry of 30 days of submission of self-certified documents on the annual work programme, appraisal and field development plan or its revision. Prior approval of the block oversight committee, DGH or the Oil Ministry will be required only in cases where extension of the contract or exploration phase is to be granted or the contractor is selling or exiting the block. End-of-year accounting statement, abandonment plan and cost of unfinished work programme too would need prior approval. “Thus the 37 erstwhile processes of contract compliance are now covered by 18 processes of contract compliance by merging or subsuming in other processes,” DGH said. Further, submission of all documents will be made online as per the given templates, it added. India in 2016 migrated to an open acreage licensing regime where companies can choose the area they want to explore rather than the government demarcating it. The new regime provides much easier compliance but the legacy contracts had continued to have a large compliance burden. The compliance requirement of NELP had also led to controversies such as allegations of gold-plating of the cost and over-estimation of reserves in KG-D6. Now the processes have been streamlined. “In order to enhance the ease of doing business, the processes have been further rationalised and limited to processes where documents shall be accepted on self-certification basis and no approval is required – 9; processes where approval will be deemed on expiry of 30 days of submission of self-certification of documents – 3; processes where approvals shall be required under rules or contracts – 6,” DGH said.
Merkel doubts Biden meeting will solve gas pipeline dispute
German Chancellor Angela Merkel said Monday that she doubts the dispute between her country and the United States over a nearly completed gas pipeline from Russia will be fully resolved at a meeting with President Joe Biden this week. Washington has long argued that the Nord Stream 2 pipeline carrying natural gas from Russia to Germany endangers Europe’s energy security and harms allies such as Ukraine, which currently profits from transit fees for Russian gas. The United States recently waived sanctions against German companies involved in the project, raising hopes in Berlin that an agreement acceptable to all sides can be found. Merkel said she will discuss the issue with Biden at a White House meeting Thursday, but added: “I don’t know whether the papers will be fully finalized, so to speak. I believe rather not.” “But these will be important talks for developing a common position,” she added. Germany is keen to increase its use of natural gas as it completes the shutdown of its nuclear power plants next year and phases out the use of heavily polluting coal by 2038. Merkel’s comments to reporters in Berlin came ahead of a meeting with Ukrainian President Volodymyr Zelenskyy, who has warned that Nord Stream 2 poses a threat to his country’s energy security. Should Russia route all of its gas around Ukraine in future, the country might be cut off from the supplies it needs, putting it at further risk of being pressured by Moscow. Russia annexed Crimea from Ukraine in 2014 and supports separatists in Ukraine’s eastern industrial heartland of Donbas. Zelenskyy said he was looking for guarantees that Ukraine will remain a transit country for Russian gas beyond 2024. Merkel said she took Ukraine’s concerns seriously and said Germany and the European Union would use their weight in negotiations with Russia to ensure the agreements are extended. “We have promised this to Ukraine and we will stick to that. I keep my promises and I believe that is true also for any future German chancellor,” she said. Merkel isn’t running for a fifth term in Germany’s national election on Sept. 26. Merkel also announced that Germany will give Ukraine 1.5 million doses of coronavirus vaccine, with more possibly shots to come.