With global crude fluctuating, OMCs to wait & watch on fuel
Oil marketing companies (OMC) continued to pause fuel price revision for the eighteenth consecutive day on Wednesday as wait and watch continues amidst fluctuating global crude prices. Global crude prices have swung in all directions in July starting with a low of $70 a barrel to quickly rise to over $77 a barrel, only to fall soon below $70 a barrel and crossing $75 a barrel later in the month. The oil prices have softened again to $72.5 a barrel. With no price increase by OMCs, in the national capital, petrol continues to be sold for Rs 101.84 per litre, while diesel is also being sold at the unchanged price of Rs 89.87 a litre on Wednesday. The pump price of fuel has been static since July 18. In the city of Mumbai, where petrol prices crossed Rs 100 mark for the first time ever on May 29, the fuel price is at Rs 107.83 per litre. Diesel price in the city is also at Rs 97.45, the highest among metros. Petrol prices in all metros have now crossed Rs 100 per litre mark. In Chennai Petrol is priced at Rs 102.49 a litre and in Kolkata Rs 101.08 a litre. Diesel is also priced at Rs 94.39 and Rs 93.02 per litre in both cities respectively. The price pause comes after fuel prices increased on 41 days in the current financial year. The 41 increases have taken up petrol prices by Rs 11.44 per itre in Delhi. Similarly, diesel has increased by Rs 9.14 per litre in the national capital. Prices of both auto fuels reduced only once in April by 16 and 14 paise per litre respectively. Diesel prices were also reduced by 16 paise per litre in Delhi on July 12. Since April 2020, petrol prices have increased by Rs 32.25 per litre from Rs 69.59 a litre to Rs 101.84 a litre now in Delhi. Similarly, diesel prices during the period have increased by Rs 27.58 per litre from Rs 62.29 to Rs 89.87 a litre in the national capital.
Low natural gas prices critical to meet India’s 15 per cent fuel share ambitions: CEEW
High natural gas prices and continued price controls could significantly slow down India’s efforts to improve gas penetration to 15 per cent of its energy mix by 2030, according to an independent study released today by the Council on Energy, Environment and Water (CEEW). If prices of natural gas remain high or increase further, its fuel share would rise from the current 6.3 per cent to only 6.4 per cent by 2030, and to 12 per cent by 2050, the study projected. The CEEW study ‘India’s natural gas future amid changing global energy dynamics’ also highlighted that a low-price regime could help India increase gas penetration to 13 per cent by 2030 and 21 per cent by 2050. However, the study recommended limiting penetration to an optimal fuel share of 18 per cent by 2050 to maximise economic gains while also meeting India’s decarbonisation requirements. Targeting this level of gas adoption would require investments of $62 billion in pipeline and LNG terminal infrastructure between 2020-50. It could also add 90,000 new jobs across the gas infrastructure value chain and generate import bill savings of around USD 835 billion, it said. “We need to accelerate gas infrastructure development by addressing regulatory challenges, increasing investments, and conducting more frequent bidding to expand coverage. In doing so, we should keep in mind two caveats,” Vaibhav Chaturvedi, Fellow, CEEW, and co-author of the study, said. He added it is critical to strike a balance between high gas penetration and deep decarbonisation to keep India on a low-carbon pathway and reduce the risk of stranded assets. The CEEW study argued that reforms are critical for creating a more market-friendly gas allocation system in India. This is despite the fact that such changes might adversely affect gas penetration in sectors currently considered “high priority”, such as fertiliser and city gas distribution.
Reliance BP Mobility planning to open retail outlets at fuel stations
Reliance BP Mobility, the fuel marketing joint venture of Reliance Industries and UK’s BP, is planning to open retail outlets including convenience stores and food joints at a number of its fuel stations, mainly along the highways. Reliance Retail will operate these outlets, including its Smart Point convenience stores, digital stores, charging points for electric vehicles, cafés and other food and beverages outlets, people familiar with the matter said. The company is also talking other food and beverage chains to open outlets at its properties, the people said. The move is aimed at tapping into the growing concept of highway retailing in India and to leverage its properties, they said. “Retail development will only happen in petrol pumps where retailing is feasible, and on the highways,” said one of the people. Reliance Retail and Reliance BP did not respond to an email seeking comment. Development of world-class highways and the growing number of Indians taking road trips have opened new opportunities for highway retailing in India, market watchers said. Property consultant Knight Frank said India’s highway retailing of food and beverages would offer a $2.7 billion opportunity by 2030. India’s road network of 5.8 million kilometres in 2017 was only second to the US, Knight Frank said in a report last year. “The existing road infrastructure presents a substantial modern retail potential in India, especially in food and beverage,” it said. Reliance had already tried its hands on highway retailing some years ago with food and beverage outlets on many of its petrol pumps, but the concept did not take off at that time. “Now they are reviving it big time,” said a second person. Others are also taking initiatives to club retailing options with fuel stations along India’s highways. Singapore-based Cube Highways has tied up with Bharat Petroleum, the country’s second largest fuel retailer, to open branded food outlets, convenience shops and toilets facilities at petrol pumps. Reliance BP aims to expand its fuel retailing network to 5,500 over the next five years from about 1,400 stations at present.
MNGL announces hike in CNG, domestic PNG prices effective 1 August
Maharashtra Natural Gas Limited (MNGL) has announced a hike in the price of compressed natural gas (CNG) and domestic piped natural gas (D-PNG), effective from August 1 in Pune, Pimpri Chinchwad and rural areas of the district. The price of CNG has been increased by Rs0.90, per kilogram, from Rs 56.60 to Rs 57.50, while PNG price is up by Rs 1.90, per standard cubic meter (SCM), to Rs 29.10, per SCM. The gas distribution company has said that the increase in input and transportation costs of gas has resulted in the price hike and that it would lead to only a marginal impact on per-kilometre running cost of CNG vehicles. MNGL’s CNG offers savings of over 60% as compared to petrol and over 40% as compared to diesel at current price levels in Pune city, the company stated. The price of CNG has been hiked after two months. The previous hike was announced in June 2021. Officials from MNGL said that being an essential utility MNGL has been supplying uninterrupted CNG in Pune through its vast network of more than 80 CNG stations. Steps have been initiated to set up more refilling stations to cover maximum area across both cities and rural locations. Even during the pandemic, despite heavy drop in sales, MNGL continued its operations to fuel emergency vehicles and other associated vehicles running on CNG, officials said. For domestic PNG, the gas distribution company has, so far, reached up to 3 lakh connections in the entire district, including urban areas.
Over 600 CNG stations will be set up in 5 years: Kerala CM P Vijayan
As many as 615 compressed natural gas (CNG) filling stations are expected to be operational in the state by 2026, CM Pinarayi Vijayan said in the assembly on Tuesday. Replying to a submission by MLA K N Unnikrishnan, LSG and excise minister M V Govindan who replied on behalf of the CM, said that the petroleum and natural gas regulatory board has entrusted Indian Oil-Adani Gas Pvt Ltd with distribution of natural gas in Ernakulam, Thrissur, Palakkad, Malappuram, Kozhikode, Wayanad, Kannur and Kasaragod. Necessary arrangements have been made in all these districts to ensure that natural gas is supplied to the company for distribution in these districts. He said that at present, there are 10 CNG stations each in Ernakulam and Thrissur, four in Kozhikode, three in Malappuram and one each in Palakkad and Kannur. The board has entrusted the company Atlantic Gulf and Pacific (AG&P) for distribution of natural gas in Thiruvananthapuram, Kollam and Alappuzha districts which are not covered by the GAIL pipeline. The two companies have initiated necessary steps for supplying gas connections for domestic and industrial purposes in 11 districts under the city gas distribution project. Presently, 3,761 domestic connections have been provided and by 2022, as many as 54,000 gas connections for domestic purposes will be completed, he said. The Kochi-Koottanad-Bengaluru-Manguluru GAIL pipeline project has provided fillip to the state’s industrial development, he said.
Oil drops for third day on concerns COVID-19 variant spread to cut demand
Oil prices fell for a third day on Wednesday on mounting concerns that the increasing spread of the Delta variant of the coronavirus in top consuming countries will cut fuel demand. Brent crude oil futures slid 22 cents, or 0.3%, to $72.19 a barrel, as of 0129 GMT. U.S. West Texas Intermediate (WTI) crude fell 33 cents, or 0.5%, to $70.23 a barrel. Both futures fell on Tuesday to their lowest since July 21 before regaining some ground by the close. The United States and China, the world’s two biggest oil consumers, are grappling with rapidly spreading outbreaks of the highly contagious Delta variant that analysts fear will limit fuel demand at a time when it traditionally rises in both countries. “Seasonal weakness in economic activity amid rising cases of the Delta variant continue to weigh on sentiment,” ANZ said in a note. “Nearly half of China’s provinces have been being gripped by the latest outbreak. This comes as the summer travel season hits its peak. This is likely to see crude oil demand come under pressure.” In China, the spread of the variant from the coast to inland cities has prompted authorities to impose strict measures to bring the outbreak under control. Still, bubbling geopolitical tensions in the Gulf may offset the demand concerns. On Tuesday, three maritime security sources clamed Iranian-backed forces seized an oil product tanker off the coast of the United Arab Emirates, though Iran denied the reports. This is the second attack on a tanker since Friday in the region, which includes the Strait of Hormuz oil export chokepoint. The UK and the U.S. are also blaming Iran for the earlier incident, in which drones crashed into the vessel and killed two sailors. U.S. stockpile data also provided some support for prices as crude oil, distillate and gasoline inventories declined. Crude stockpiles fell by 879,000 barrels for the week ended July 30, according to two market sources, citing American Petroleum Institute figures on Tuesday. Gasoline inventories fell by 5.8 million barrels and distillate stocks fell by 717,000 barrels, the data showed, according to the sources, who spoke on condition of anonymity.
Ivory Coast to build 200 MW LNG plant, says energy minister
Ivory Coast is in talks to build a 200 megawatt power plant fuelled by liquefied natural gas (LNG) as it seeks to avoid outages that rocked the country earlier this year, Mines and Energy Minister Thomas Camara said on Tuesday. A prolonged dry season reduced water levels at hydropower dams in May, leaving households and businesses without power as well as cutting supplies to neighbouring West African countries including Mali. Camara said flows had returned to normal since July 9, while exports had risen as of this week. “We have taken steps to ensure that this circumstantial situation does not repeat itself,” he told a news conference, announcing the plan for the LNG plant. The ministry will share further details on the cost and timeframe for the plant’s construction once discussions are concluded, he said. The outages in May were a result of a generation deficit of about 200 MW, or nearly 10% of the national power company’s 2,230 MW capacity, its director general said at the time.