Uzbekistan temporarily suspends gas exports to cover domestic needs
Uzbekistan has halted exports of natural gas in order to meet domestic energy needs, the Interfax agency reported on Thursday. The announcement comes as protests rage in neighboring Kazakhstan, spurred initially by gas price hikes. “For now, exports of gas have been completely halted and all the volumes are being directed towards domestic use, particularly to meet the population’s needs,” Uzbekistan’s energy ministry was quoted as saying. The ministry also said there were no exports of gas to Russia and no export plans for 2022.
“India on track to surpass China as third-largest ethanol consumer by 2026”: IEA
The ethanol demand in India has tripled between 2017 and 2021 with consumption expected at 30 million litres in the last calendar year. As a result, India will surpass China to become the world’s third-largest ethanol consumer by 2026. “India is on track to surpass China as the world’s third-largest ethanol consumer by 2026. In January 2021, India brought forward its 20 per cent ethanol blending target with gasoline from 2030 to 2025 and is aiming to start selling 20 per cent blends in 2023,” as per the International Energy Agency (IEA). In October last year road Transport and Highways Minister Nitin Gadkari, addressing a webinar on alternative fuels organised by industry body ISMA, said the government is promoting ethanol manufacturing in a big way and assured that it will procure all ethanol produced in the country. In an effort to reduce the import of petroleum products, the government has been encouraging farmers to produce ethanol that can be blended with petrol and used as a fuel in vehicles. India has made impressive progress in increasing ethanol blending, from 2 per cent in 2017 to 8 percent by the summer of 2021. “In our accelerated case, we assume India meets these challenges and achieves its 20 per cent blending target in 2025,” IEA projected. The government has hiked the price of ethanol extracted from sugarcane for blending in petrol by up to Rs 1.47 per litre for 2021-22 marketing year starting December, as part of its target to achieve 20 per cent doping by 2025. Higher mixing of ethanol in petrol will help cut India its oil import bill and also benefit sugar cane farmers as well as sugar mills.
GAIL, BPCL, HPCL bids for city gas licences raise eyebrows
GAIL, BPCL and HPCL are competing for licences in 19 city gas distribution areas – nearly a third of 61 being contested in the latest bidding round – with the companies they control, drawing allegations of unfair practice. For instance, the licence area comprising Baloda Bazar, Gariyaband and Raipur districts in Chhattisgarh has received 16 bids, of which six are from companies — GAIL NSE 1.84 % Gas, BPCL, HPCL, Indraprastha Gas (IGL), Mahanagar Gas (MGL) and Aavantika Gas – sharing a complex web of relationship. Gail Gas is a fully owned subsidiary of GAIL (India). GAIL (India) is also the promoter of MGL. Gail (India) and BPCL jointly control IGL, while Gail (India) and HPCL jointly control Aavantika Gas. Similarly, of the 15 bids received for Nagpur, four are from Gail Gas, MGL, Maharashtra Natural Gas (MNGL) and BPCL. MNGL is a GAIL-BPCL joint venture. BPCL is competing for licences with its related entities in 15 areas while Gail Gas is in a contest in 11 and HPCL in three. IGL and Central UP Gas, the two BPCL-GAIL JVs, are competing for two city gas areas in UP. BPCL, GAIL, HPCL and Petroleum & Natural Gas Regulatory Board didn’t respond to ET’s request for comment. However, a source close to PNGRB said all these firms were ultimately owned by the government and run by independent boards, leaving no scope for any unfair practice. An executive at a large city gas firm, however, rejected PNGRB’s defence, saying the auction process has been vitiated, as the group with more than one bid for a licence has a bigger chance to win. “It’s unfair to other bidders – public or private,” he said. Private players like Adani, Think Gas and Torrent Gas are some of the big bidders in the current round. An addendum to the tender issued by PNGRB on November 18 says: “In case an entity forms more than one JV/consortium, for example, X forms JV/consortium with Y (consortium C-1), and X forms another JV/consortium with Z (consortium C-2), then consortium C-1 & C-2 are not allowed to bid for the same GA”. The source close to PNGRB said the addendum doesn’t apply to established JVs but must be seen in the context of new consortiums formed to comply with the net worth criteria and to avoid any manipulation.
Britain’s Cairn Energy withdraws all lawsuits against India, now entitled to Rs 79 billion tax refund
Britain’s Cairn Energy has dropped all lawsuits against the Indian government and its entities in courts from the US to France and to Singapore, to now be entitled for about Rs 79 billion refund of taxes that were collected to enforce a retrospective tax demand. As part of the settlement reached with the government in the seven-year-old dispute over the levy of back taxes, the company – which is now known as Capricorn Energy PLC – has withdrawn all cases that were brought to collect the tax refund ordered by an international arbitration tribunal after rescinding retrospective raising of demand, according to an advertisement it issued in Indian newspapers on Wednesday. The government had initially refused to honour the December 2020 arbitration award but in August 2021 brought a law to scrap all retrospective tax demands and refund money collected, after it faced prospects of assets, ranging from flats used by its diplomatic staff in Paris and Air India planes in the US being seized to recover the refund due. In the advertisement, a requirement under the August 2021 law – the company said: “It has entered into the final stage in its undertaking with the Government of India by withdrawing Indian and global appellate and enforcement proceedings. This action is the final necessary step by the company under the rules of India’s Taxation (Amendment Act), 2021,”. The company on November 26, 2021, initiated proceedings to withdraw lawsuits it had filed in several jurisdictions to enforce an international arbitration award which had overturned the levy of Rs 102.47 billion retrospective taxes and ordered India to refund the money already collected. First, the lawsuit brought in Mauritius for recognition of the arbitration award was withdrawn, followed by similar measures in courts in Singapore, the UK, and Canada. On December 15, it sought and got ‘voluntary dismissal’ of a lawsuit it had brought in a New York court to seize assets of Air India to recover the money due from the government. On the same day, it made a similar move in a Washington court where it was seeking recognition of the arbitration award. Recognition of arbitration award is the first step before any enforcement proceedings like the seizure of assets. The critical lawsuit in a French court, which had attached Indian properties on the petition of Cairn, was withdrawn thereafter followed by the one in Netherlands. “The company will now file its Form 3 with the Income Tax Department, which will allow the Government to proceed to the final stage of issuing Form 4 of its undertakings,” the advertisement said. Form 3 is an application that details the cases withdrawn. Issue of Form 4 would lead to the refund of the taxes. While Form 3 is likely to be filed this week, the company would in all likelihood get the refund within this month. “This will result in the Taxation Amendment Act nullifying the tax assessment originally levied against the company in January 2016 and the Government of India ordering the refund of the taxes collected from the company in respect of that assessment,” the advertisement said. It further stated that it is issuing a notice to confirm that the company shall forever irrevocably forgo the right to use any arbitration or court order against the Indian government or its entities and no claim subsists. “The company has provided an undertaking which includes a complete release of the Republic of India and any Indian affiliates with respect to any award, judgment, or court order” and has provided an “indemnity against any claims,” it added. The attachment of Indian assets, including some flats in Paris, in July 2021 had triggered scrapping of the 2012 amendment to the Income Tax Act. This gave taxmen powers to go back 50 years and slap capital gains levies wherever ownership had changed hands overseas but business assets were still in India. The tax department had used the 2012 legislation to levy Rs 102.47 billion in taxes on alleged capital gains Cairn made on reorganisation of business in India prior to its listing in 2006-07. Cairn contested such demand saying all taxes due (when the reorganisation, which was approved by all statutory authorities took place) were duly paid. But the tax department in 2014 attached and subsequently sold the residual shares that Cairn held in the Indian unit, which was in 2011 acquired by Vedanta group. It also withheld tax refunds and confiscated dividends due to it to settle part of the tax demand. All this totalled Rs 79 billion. Seeking to repair India’s damaged reputation as an investment destination, the government in August 2021 enacted new legislation to drop Rs 1100 billion in outstanding claims against multinationals such as telecom group Vodafone, pharmaceuticals company Sanofi and brewer SABMiller, now owned by AB InBev, and Cairn. About Rs 81 billion collected from companies under the scrapped tax provision are to be refunded if the firms agreed to drop outstanding litigation, including claims for interest and penalties. Of this, Rs 79 billion is due only to Cairn. Subsequent to this, the government in November 2021 notified rules that when adhered to will lead to the government withdrawing tax demands raised using the 2012 retrospective tax law and any tax collected in the enforcement of such demand is paid back. For this, companies are required to indemnify the Indian government against future claims and withdraw any pending legal proceedings. An international arbitration tribunal in December overturned the levy of Rs 102.47 billion in taxes on a 2006 reorganisation of Cairn’s India prior to its listing, and asked the Indian government to return the value of shares seized and sold, dividend confiscated and tax refund withheld. This totalled USD 1.2 billion-plus interest and penalty. The government initially refused to honour the award, forcing Cairn to identify USD 70 billion of Indian assets from the US to Singapore to enforce the ruling, including taking flag carrier Air India Ltd to a US court in May.
“India on track to surpass China as third-largest ethanol consumer by 2026”: IEA
The ethanol demand in India has tripled between 2017 and 2021 with consumption expected at 30 million litres in the last calendar year. As a result, India will surpass China to become the world’s third-largest ethanol consumer by 2026. “India is on track to surpass China as the world’s third-largest ethanol consumer by 2026. In January 2021, India brought forward its 20 per cent ethanol blending target with gasoline from 2030 to 2025 and is aiming to start selling 20 per cent blends in 2023,” as per the International Energy Agency (IEA). In October last year road Transport and Highways Minister Nitin Gadkari, addressing a webinar on alternative fuels organised by industry body ISMA, said the government is promoting ethanol manufacturing in a big way and assured that it will procure all ethanol produced in the country. In an effort to reduce the import of petroleum products, the government has been encouraging farmers to produce ethanol that can be blended with petrol and used as a fuel in vehicles. India has made impressive progress in increasing ethanol blending, from 2 per cent in 2017 to 8 percent by the summer of 2021. “In our accelerated case, we assume India meets these challenges and achieves its 20 per cent blending target in 2025,” IEA projected. The government has hiked the price of ethanol extracted from sugarcane for blending in petrol by up to Rs 1.47 per litre for 2021-22 marketing year starting December, as part of its target to achieve 20 per cent doping by 2025. Higher mixing of ethanol in petrol will help cut India its oil import bill and also benefit sugar cane farmers as well as sugar mills.