Biden Calls Energy Crisis “Incredible Transition”
President Biden came under fire from fellow politicians this week after he called the record-high retail fuel prices in the U.S. part of “an incredible transition” away from oil and gas. “Here’s the situation. And when it comes to the gas prices, we’re going through an incredible transition that is taking place that, God willing, when it’s over, we’ll be stronger, and the world will be stronger and less reliant on fossil fuels when this is over,” Biden said during a joint news conference with Japanese Prime Minister Fumio Kishida. The President’s remarks come as the average gasoline price in the U.S. reached $4.596 per gallon at the start of this week, with diesel prices at $5.554 per gallon despite the planned massive release of crude oil from the strategic petroleum reserve and new plans for the release of diesel from federal reserves as well. “And what I’ve been able to do to keep it from getting even worse — and it’s bad. The price of gas at the pump is something that I told you — you heard me say before — it would be a matter of great discussion at my kitchen table when I was a kid growing up. It’s affecting a lot of families,” Biden also said. “But we have released over two hundred and, I think, fifty-seven thousand — million barrels of oil, I should say. Us and the rest of the world we convinced to get involved. It’s helped, but it’s not been enough,” the U.S. President added. Although gasoline prices are putting pressure on households, some experts are more concerned about diesel prices, which help keep inflation higher by adding to the transportation costs of most goods shipped and sold across the U.S. In the East Coast, according to the WSJ, diesel fuel supplies are at the lowest since 1990 at least.
Centre all set to hire private sector executive to head ONGC, offers attractive pay package
The Centre is actively considering hiring a suitable candidate for the top job at the country’s largest crude oil and natural gas company—Oil and Natural Gas Corporation (ONGC)—amid soaring global energy prices in an earnest attempt to push for higher oil and gas production to cut India’s import dependence. In February, the government constituted search-cum-selection committee to choose a chairman-cum-managing director (CMD) at ONGC and is planning to seek out private sector executives as well, people with direct knowledge of the matter told ET. Government officials are of the view that a private sector executive could help revamp the company, increase its risk-taking capability and enhance efficiency. Since the retirement of Shashi Shanker in March 2021, ONGC, which produces more than half of India’s oil and gas, has been without a full-time CMD for more than a year. The main obstacle to rope in a top private sector executive is the lower remuneration at public sector companies, and the panel, therefore, is weighing options to give a lucrative compensation along with other terms that may be essential for the CMD to function smoothly. State-owned companies’ executives won’t be eligible for the pay package that will be on offer to those from the private sector. It is worth mentioning here that the panel has not met formally yet. It includes Public Enterprises Selection Board (PESB) chairperson Mallika Srinivasan, oil secretary Pankaj Jain and Indian Oil’s former chairman B Ashok. Srinivasan, the chairperson of tractor-maker Tractors and Farm Equipment (TAFE) is the first PESB chief from the private sector. Generally, the PESB selects directors and chairmen for state-run entities. Earlier, the committee rejected all nine candidates who were interviewed for the ONGC role last June. They included some ONGC executives and senior bureaucrats. India’s oil production has been on a downward slide during the past few years. From 35.7 million tonnes in 2017-18, it dropped to 34.2 million tonnes in the following year and 32.2 in 2019-20 and 30.5 million tonnes in 2020-21. Plus, ONGC has reported a gradual fall in output for over a decade now. ONGC’s production has fallen for years and its market value, at present at Rs 1950 billion, has dropped 11 per cent in five years. However, its shares are up about 36 per cent from a year ago because of elevated oil prices.
Oil at $110 a barrel not sustainable, says Hardeep Puri at WEF Davos
Crude oil price of $110 a barrel is not sustainable, Union minister of petroleum and gas Hardeep Singh Puri told the World Economic Forum in Davos on Tuesday. The Indian basket of crude comprising Oman, Dubai and Brent crude, was last recorded at $110.98 per barrel on 23 May. As countries around the world struggle with the impact of inflation on disposable income, India’s Commerce Minister Piyush Goyal said on the same WEF panel that food inflation in the South Asian country was at a “manageable level”. Goyal also said that India was producing enough wheat for domestic consumption, as some countries face shortages due to price rises and problems in getting the grain from major producer Ukraine following Russia’s invasion. India’s oil production This comes as official data showed India’s crude oil production fell 1 per cent in April after lower output from fields operated by the private sector wiped away gains by state-owned firms such as ONGC. India produced 2.47 million tonnes of crude oil in April, down from 2.5 million tonnes in the same month last year, according to data released by the Ministry of Petroleum and Natural Gas. Oil and Natural Gas Corporation (ONGC) produced 1.65 million tonnes of crude oil in April, which was nearly 5% more than the target set for it and 0.86% high than the 1.63 million tonnes produced last year. Oil India Ltd (OIL) produced 3.6% more crude at 2,51,460 tonnes but fields operated by the private sector produced 7.5% less crude oil at 5,67,570 tonnes. The government has been focused on raising domestic production of oil and gas to cut reliance on imports. India imports 85% of its oil needs and about half of its natural gas requirement. Natural gas output rose 6.6% to 2.82 billion cubic meters on the back of higher output from eastern offshore – home to the KG-D6 block of Reliance Industries Ltd and BP plc. ONGC produced 1 per cent less natural gas at 1.72 bcm, while eastern offshore output jumped 43 per cent to 0.6 bcm, the data showed. With demand return, refineries processed 8.5% more crude oil at 21.6 million tonnes in April. Public sector refineries turned 12.8% more crude into fuel, while private and joint sector units’ crude thruput was 1.8% higher. Meanwhile, the central government announced the reduction in central excise duty on petrol by ₹8 per litre and on diesel by ₹6 per litre on Saturday.
Sri Lanka hikes fuel prices; petrol at all-time high of Rs. 420, diesel Rs. 400 per litre
Crisis-hit Sri Lanka on May 24 raised the petrol price by 24.3% and diesel by 38.4%, a record hike in fuel prices amidst the country’s worst economic crisis due to the shortage of foreign exchange reserves. With the second fuel price hike since April 19, now the most-used Octane 92 petrol would cost 420 Sri Lankan rupees ($1.17) and diesel 400 Sri Lankan rupees ($1.11) a litre, an all-time high. The decision to raise the Octane 92 petrol price by 24.3% or 82 rupees and diesel by 38.4% or 111 rupees per litre was taken by the state fuel entity, Ceylon Petroleum Corporation (CPC). “Fuel Price will be revised from 3 a.m. today. Fuel pricing formula that was approved by the Cabinet was applied to revise the prices,” Power and Energy Minister Kanchana Wijesekara said on Twitter. “Price revision includes all costs incurred in importing, unloading, distribution to the stations and taxes. (1) Fuel Price will be revised from 3am today. Fuel pricing formula that was approved by the cabinet was applied to revise the prices. Price revision includes all costs incurred in importing, unloading, distribution to the stations and taxes. Profits not calculated and included. “The Cabinet also approved the revision of transportation and other service charges accordingly. The formula will be applied every fortnight or monthly,” he said. The hike came as the public continues to suffer in long queues at fuel stations hit by shortages. Lanka IOC, the Sri Lankan subsidiary of India’s oil major Indian Oil Corporation, has also raised the retail prices of fuel. “We have raised our prices to match the CPC,” Manoj Gupta, the CEO of LIOC, told PTI. Meanwhile, the autorickshaw operators said they would raise the tariff to be 90 rupees per first kilometre and 80 rupees for the second onwards. As a measure to mitigate the costs, the government announced that the heads of institutions would be given the discretion over which employees would be essential to report physically. The rest be allowed to work from home. Lanka IOC has been in operation in Sri Lanka since 2002. Sri Lanka has been mulling different options to facilitate measures to prevent fuel pumps from going dry, as the country faces a severe foreign exchange crisis to pay for its imports. The island nation is grappling with an unprecedented economic turmoil, the worst since its independence from Britain in 1948. It is struggling with a shortage of almost all essentials, due to the lack of dollars to pay for the imports. A crippling shortage of foreign reserves has led to long queues for fuel, cooking gas and other essentials while power cuts and soaring food prices heaped misery on the people.