US oil set for biggest weekly loss since Oct as Delta variant fans demand worries
US crude oil futures were on track for their biggest weekly decline since late October on Friday, with prices coming under pressure as top consumers impose travel restrictions amid the spread of the Delta variant of the coronavirus. However, rising tensions in the Middle East provided a floor under the market. US West Texas Intermediate (WTI) crude futures have dropped 6.6 per cent this week, the biggest weekly loss since the end of October. The market was unmoved at $69.09 a barrel, as at 0038 of GMT. Brent crude oil futures have given up 6.6 per cent, the most since mid-March and prices were down 2 cents at $71.27 a barrel on Friday. “Oil has been under pressure this week as moves to reinstate travel restrictions in China reflected the situation across Asia,” ANZ said in a report. “At least 46 cities have advised against travelling, and authorities have suspended flights and stopped public transport. This could impact oil demand as it comes towards the end of the summer travel season.” Japan is poised to expand emergency restrictions to more prefectures while China, the world’s second-largest oil consumer, has imposed curbs in some cities and cancelled flights, threatening fuel demand. In the United States, daily new COVID-19 cases have climbed to a six-month high, with more than 100,000 infections reported nationwide as the Delta variant ravaged Florida and other states with lower vaccination rates. Worries over rising tensions between Israel and Iran limited the decline in prices. Israeli jets struck what its military said were rocket launch sites in Lebanon early on Thursday in response to two rockets fired towards Israel from Lebanese territory, in an escalation of cross-border hostilities amid heightened tensions with Iran. The exchange came after an attack on a tanker off the coast of Oman last Thursday, which Israel blamed on Iran. Two crew members, a Briton and a Romanian, were killed. Iran denied any involvement.
Reliance & BP Wants To Dominate Highway Retail In India: Find Out How?
Reliance BP Mobility will open retail stores at fuel stations situated along Indian highways. Reliance BP Mobility is the joint venture between Reliance Industries and UK’s BP dealing in fuel marketing. How It Will Operate Reliance Retail will be running these outlets which include its Smart Point convenience stores, digital stores, charging points for electric vehicles, cafés and other food and beverages outlets. The company could also get other food and beverage chains to open outlets at Reliance properties. The move is an attempt to tap into the emerging concept of highway retailing in India and to leverage its properties. Indian Highway Retailing: An Emerging Opportunity The market in India has seen a boom with the construction of world-class highways and the rising number of Indians taking road trips. India has a road network of 5.8 million kilometres as of 2017 which is just behind the leader, the US. The modern retail potential is even bigger considering the current road infrastructure in India. Highway retail in India could surge to a $2.7 billion opportunity by 2030. Competition Reliance had made an effort related to highway retailing a few years ago, but it failed to take off. This is a prime time for it to revive those ambitions since the competition is heating up with Singapore-based Cube Highways tying up with Bharat Petroleum. The duo will open branded food outlets, convenience shops and toilet facilities at petrol pumps. Reliance is aiming to expand its fuel retailing network from the present 1,400 stations to 5,500 in the next 5 years.
Govt to amend Income Tax Act to nullify retrospective tax demands
After Vodafone and Cairn Energy setbacks, Union government on Thursday moved to end retrospective tax by amending Income Tax Act. Finance Minister Nirmala Sitharaman introduced The Taxation Laws (Amendment) Bill, 2021 in the Lok Sabha, which seeks to withdraw tax demands made on indirect transfer of Indian assets prior to May 28, 2012. Government also proposed to refund the amount paid in these cases without any interest thereon. Tax raised for the indirect transfer of Indian assets before May 2012 would be “nullified on fulfillment of specified conditions” such as the withdrawal of pending litigation and an undertaking that no damages claims would be filed, a government statement said. This Bill impacts retro tax cases of at least two big companies — Cairn Energy Plc and Vodafone Group of UK. Both firms had won international arbitrations against levy of retrospective taxes on them. “Bill proposes to amend IT Act, so as to provide that no tax demand shall be raised in future on basis of said retrospective amendment for any indirect transfer of Indian assets if transaction before 28th May, 2012,” said government.
Assam government approves ethanol production promotion policy
Eyeing to get investment in the Ethanol, Assam government has come up with Ethanol Production Promotion Policy 2021. The policy offered a huge range of incentives to investors’ investing in the sector. However, incentives will be applicable to Ethanol units selling their produce to the Oil Manufacturing Companies (OMCs) The State Cabinet has approved the Assam Ethanol Production Promotion Policy 2021. The Policy shall be valid upto 31st March 2026. Assam’s industries and commerce minister Chandra Mohan Patowary said that Assam is the second State in the country to bring out an ethanol policy, and is thus among the pioneers in the line. The incentives under the Policy to standalone green-field ethanol producing industrial units – catering solely to Oil Manufacturing Companies (OMCs) for blending with petrol and diesel include Capital Subsidy at 20% of the cost of Plant and Machinery, with maximum Rs 5 crores – in addition to the 30% Capital Subsidy under provision of under North East Industrial Development Scheme (NEIDS)2017. Besides power Subsidy Re 1 per unit, in addition to the Rs 2 per unit offered under Industrial and Investment Policy of Assam 2019, for a period of 5 years from the date of industrial production; subject to an overall maximum of Rs 75 lakhs per annum. 5% Interest Subsidy on working capital loan for 5 years subject to an overall ceiling of Rs 50 lakhs per annum, in addition to the 2% interest subsidy offered under Industrial and Investment Policy of Assam 2019; and the 3% interest subsidy under NEIDS 2017; The policy offered, “100% SGST Reimbursement for a period of 5 years, upper limit being 250% of Fixed Capital Investment; in addition to the reimbursement of the central share of the CGST, IGST and Income Tax offered under NEIDS 2017 for a period of 5 years; 100% Exemption of Land Conversion Fees for conversion of land to industrial class, Employment Incentive in the form of reimbursement of expenditure on account of provident fund contribution of permanent resident employees for 5 years; and Skill Development Subsidy of Rs 20,000 per employee, the incentive being applicable only for training of permanent resident employees. The eligible units shall also enjoy 100% exemption of Stamp Duty and Registration Fees, subject to a monetary ceiling of Rs 25 lakhs only. The Ministry of Petroleum & Natural Gas formulated the National Policy on Biofuels 2018, which aims to increase the usage of biofuel in the energy and the transportation sector. India’s net import of petroleum was 185 million metric tonnes at a cost of US $55 billion in 2020-21 with a lion’s share of its utilization having been in the transportation sector. Promoting the use of biofuel like ethanol as a blend stock with main automotive fuel like petrol or diesel can definitely alleviate the draining of the Forex Reserves. NITI Aayog has also brought out a detailed Roadmap for Ethanol Blending in India. The minister said, ” Assam has four refineries and produces huge amounts of petrol and diesel, which ensures viability and promise for ethanol projects in Assam. IOCL, which has been importing ethanol for its blending programme and the company is contemplating setting up a captive ethanol plant. Several investors have sent feelers for investing in the sector.” He said Numaligarh Refinery Limited (NRL) wherein Assam Government has recently raised its share to 26%, is undertaking a JV project with 2 European companies to set up a bio refinery near its existing refinery in Numaligarh which on being commissioned in 2022-23 shall convert 300,000 tons of dry bamboo annually into bio-ethanol and other biofuels. NRL has a 50% stake in the Rs 2600 crore project. Ethanol imports reached a record 750 million liters in 2019, covering over 30% of its total demand. Domestic ethanol production can attenuate the import graph, and the Ethanol Policy of Assam can go a long way in fulfilling that role.
Petrol price hike: Demand for CNG kits soars amid spike in fuel prices
Amid rising petrol prices across the country, people now prefer to install CNG kits in their four wheelers. In the recent days, there have been a lot of inquiries regarding the CNG kits and the installation process. However, due to the shortage of raw material, the price of CNG kits has also increased by about Rs 10,000. At the same time, people are unable to procure the kits on time. The cost of fuel in CNG vehicles is less as compared to petrol-run vehicles, and one can also get a better mileage. The four-wheeler drivers, who have the option of getting a CNG kit, are preferring to get it with the aim of cutting down on the fuel cost. In fact, the 4 kg cylinder of the CNG kit can run for about 150 km after a single refill. However, a car can run less than 100 km following a Rs 500 petrol top-up. Danish, who is into the CNG kit cylinders business in Ghaziabad, adjacent to Delhi, says: “Everyday, about 10 to 15 people come to my shop to inquire about getting CNG kits installation. But in view of the increasing demands of CNG kits, the goods are not arriving on time… so, it is difficult to install CNG kit in every vehicle. “Now CNG kits have started selling in the ‘black market’ as well. At the same time, the prices of CNG kits are also increasing due to this reason. “Earlier, a kit installation on the car used to cost around Rs 30,000 but now it is selling at around Rs 40,000,” he said. A customer who had come to install a CNG kit said that driving the car has become an expensive affair due to the hike in the price of fuel. Petrol price has crossed the Rs 100-mark in various states across the country, while diesel price is also about to hit the century-mark.
GAIL first quarter net profit jumps 500 per cent to Rs 1,530 cr
GAIL India Ltd, the nation’s largest gas marketer and transporter, on Thursday reported a 500 per cent jump in its June quarter net profit on the back of higher sales and margin boost in gas as well as petrochemicals. Net profit of Rs 1,529.92 crore in April-June was up from Rs 255.51 crore in the same period a year back, the company said in a statement. The profit was, however, lower than the Rs 1,907.67 crore earning in the preceding January-March quarter. The April-June 2020 quarter was heavily impacted by muted economic activity and restricted mobility due to a nationwide coronavirus lockdown. This impacted gas sales and demand for petrochemicals. This year, the second wave of coronavirus infections impacted economic activity but not to the extent witnessed last year as lockdown restrictions were more local. “The increase in the profits is mainly attributable to better physical performance in natural gas marketing and transmission, improved margins in gas marketing due to favourable market conditions and better price realization in petrochemicals and liquid hydrocarbons,” the statement said. With an increase in the volume of gas transported through GAIL pipelines, the profitability from the business at Rs 914.90 crore was up 27 per cent year-on-year but 3.6 per cent lower over the preceding quarter. Margins on gas sales helped the company report a segment profit of Rs 377.61 crore from a loss of Rs 545.46 crore last year. It was higher than Rs 280.89 crore profit in the preceding quarter. Profit from the petrochemical business at Rs 138.30 crore compared with a loss of Rs 154.43 crore last year. “During the quarter, natural gas transmission and natural gas marketing volume increased by 19 per cent and 18 per cent respectively as compared with corresponding quarter in the previous year. “The volume growth is due to the normalcy of the business activities as against nationwide lockdown during Q1 FY21,” it said. Turnover rose 44 per cent to Rs 17,386.63 crore. Manoj Jain, chairman and managing director, GAIL said the company is focused on the development of the national gas grid. The firm along with its joint ventures is executing pipeline projects of around 8,000 kms with an investment of around Rs 38,000 crore, he said. GAIL is also expanding polypropylene production capacity by setting up 500,000 tonnes PDHPP Unit at Usar (Maharashtra) and 60,000 PP unit at Pata (Uttar Pradesh) with an approximate investment of Rs 10,000 crore. During the current financial year, GAIL has a capital expenditure plan of Rs 6,600 crore. Jain added that GAIL is exploring possibilities for expanding its footprint in renewables.