India Poised for $4.95 Billion Natural Gas Infrastructure Investment
India is expecting significant investment of 410 billion rupees ($4.95 billion) to build a natural gas pipeline infrastructure in its northeastern states and the federal territories of Kashmir and Ladakh. This investment is part of India’s efforts to increase the use of cleaner fuel and reduce carbon emissions. Prime Minister Narendra Modi aims to raise the share of natural gas in India’s energy mix to 15% by 2030, up from the current 6.2%. The development of natural gas infrastructure in the northeast region will also help in utilizing domestically produced gas. Licenses have been awarded to supply natural gas to small industries, automobiles, and households in the northeastern states and the territories of Kashmir and Ladakh. The city gas distribution network is expected to cover the entire northeastern region by the end of 2025. State-run companies Bharat Petroleum Corporation Ltd (NSE: BPCL) Hindustan Petroleum Corp Ltd (NSE: HINDPETRO), and Oil India Ltd (NSE: OIL) have licenses to set up city gas distribution networks in various areas. Additionally, the pipeline network will enable the monetization of surplus gas from Oil India and Oil and Natural Gas Corporation Ltd (NSE: ONGC) in the northeastern states. Why This Is Important for Retail Investors Investment Opportunities: The massive investment in natural gas infrastructure in India offers potential investment opportunities for retail investors. As the industry expands, there will be a growing demand for companies involved in pipeline construction, gas distribution, and exploration. Clean Energy Focus: With India’s commitment to reducing carbon emissions and increasing the share of natural gas in its energy mix, there will be a significant shift towards cleaner fuel sources. This presents opportunities for retail investors to support environmentally responsible initiatives and be part of the transition to a greener economy. Economic Growth Potential: The development of natural gas infrastructure is crucial for economic growth in the northeastern states and territories. Retail investors can benefit from investing in companies operating within these regions, as the increased access to clean energy will unlock new business opportunities and drive economic development. Diversify Portfolio: Including investments related to natural gas infrastructure in India can help retail investors diversify their investment portfolios. By investing in different sectors and regions, investors can spread their risk and potentially enhance their returns. Long-Term Sustainability: Investing in the natural gas sector aligns with the global trend towards cleaner and more sustainable energy sources. By investing in this sector, retail investors can contribute to long-term sustainability while potentially reaping financial rewards as the industry grows and evolves. Capitalize with Renowned Leaders in Energy Investment This under-the-radar stock presents an alternative investment idea in the small-cap sector. Leading the company is a renowned and accomplished team with a strong track record in energy and capital markets. With their exceptional track record, robust financial backing, industry expertise, resilient leadership skills, and extensive experience, this team provides a solid foundation for the company. Heightened geopolitical tensions have sparked a pressing need for Europe to strengthen its energy security.
India Faces Clean Energy Challenges As Energy Demand Soars, Global Fossil Fuel Subsidies Rise
The 2022 global energy crisis, together with India’s growing energy demand, has led the country to adopt a hybrid approach, expanding all forms of supply in 2023. This approach has pushed India’s total energy subsidies to 9-year high of Rs 3200 billion (USD 39.3 billion) for the fiscal year ending 2023, states new report titled ‘Mapping India’s Energy Policy: A Decade in Action’ by International Institute for Sustainable Development (IISD), an independent think tank working for a stable climate, sustainable resource management. It states in recent years, India has positioned itself as an international climate leader, steering the G20 under its presidency to call for global renewable energy capacity to triple by 2030 while also funding decarbonization measures to decouple the fast-growing economy from greenhouse gas emissions and reach net-zero targets. However, clean energy subsidies accounted for less than 10% of total energy subsidies in FY 2023, while coal, oil, and gas subsidies contributed around 40%. The majority of the remaining subsidies were for electricity consumption, particularly in agriculture. In 2023 rising energy demands and the impact of the international energy price crisis following Russia’s invasion of Ukraine led India to put several measures in place that significantly increased support for fossil fuels. With an aim to protect low-income households, India responded to peaking fossil fuel prices in 2022/2023 by capping retail prices of petrol, diesel, and domestic liquefied petroleum gas; cutting taxes; providing direct budgetary transfers to businesses and consumers; and supporting existing energy supplies. As a result, oil and gas subsidies rose by 63% in FY 2023 compared to FY 2022, according to a report by the International Institute for Sustainable Development (IISD)
BPCL signs initial pact to set up Compressed Bio Gas plants in Bhilai
An MoU was signed on Wednesday between BPCL, Chhattisgarh Biofuel Development Authority and municipal corporations of Raipur and Bhilai for the production of Compressed Bio Gas (CBG) in Chhattisgarh, officials said. As per the pact, BPCL- a central PSU, will set up CBG plants in Raipur and Bhilai with an investment of around Rs 1 billion and the capacity of each plant will be 100-150 tonne per day. The MoU was signed in the presence of Chief Minister Vishnu Deo Sai and Deputy CM Arun Sao here at the former’s official residence, they said. In his address, Chief Minister Sai said the establishment of CBG plants is a key step towards clean city, clean energy and zero carbon emissions. About 200-250 metric tonne of municipal solid waste will be used every day in the production of biofuel in the two CBG plants. BPCL will invest approximately Rs 1 billion for setting up the two plants, Sai said. The setting up of these plants will create about 60,000 man days of employment directly and indirectly every year. On production and sale at full capacity in these plants, the state will receive GST to the tune of Rs 4.5 million per year, he said. These plants will also yield organic fertilizer as a by-product which will help in organic farming in the state, he added. The MoU was signed by Chief Executive Officer of Chhattisgarh Biofuel Development Authority Sumit Sarkar, Chief General Manager of BPCL, Mumbai Anurag Saravagi, Commissioner of Raipur Municipal Corporation Avinash Mishra and Commissioner of Bhilai Municipal Corporation Devesh Kumar Dhruv, officials said.
Rising Gasoline Prices Bring Bad News for Biden
The recent rise in U.S. gasoline prices is driving up inflation higher than expected, complicating the Fed’s monetary easing plans and President Joe Biden’s task to convince voters his Administration is winning the fight on the economy front. The latest U.S. consumer price reading from Tuesday showed inflation rose more than anticipated on the back of a surge in gasoline prices. Granted, gas prices in the U.S. are now slightly lower than they were at this time last year. But they are a massive 60% higher now than they were in early November 2020, just before President Biden won the election. The rise in gasoline prices is typical for this time of year—summer-spec fuels are being rolled out, demand is inching up as Americans drive more with the warmer weather, and production overall has been lower because of seasonal refinery maintenance. But the jump in gas prices ahead of and during the summer is expected to reverse to a steady decline in the autumn with the end of the driving season, and ahead of the presidential election in November. Experts don’t see the average national price topping $4 per gallon this year. Nevertheless, higher gas prices pushing up inflation numbers in an election year can’t be good for President Biden, who is struggling to convince likely voters that the economy is doing well. The Administration doesn’t have many tools to lower gasoline and other energy prices, with the Strategic Petroleum Reserve (SPR) low. Moreover, gasoline and distillate fuel inventories in the United States are below the five-year seasonal averages, leaving prices exposed to upswings if sudden outages occur. Gasoline prices are set to fall ahead of the election, but by then, they may have done the damage of derailing President Biden’s showing of good economic performance coupled with lower consumer prices. Last week, gas prices rose for a second consecutive week. “Much of the seasonal rise that happens this time of year is a culmination of refinery maintenance, the switch to summer gasoline, and rising demand,” said Patrick De Haan, head of petroleum analysis at GasBuddy. The current rise in gas prices is normal for this time of year, but it is still being felt by consumers/voters. U.S. inflation rose by 3.2% over the last 12 months to February, data from the Labor Department showed on Tuesday. The rise in consumer prices was higher than expected, while gasoline and shelter contributed over 60% of the monthly increase in the index for all items. Core inflation – prices less gasoline and food – was 0.4% last month over January, suggesting still sticky inflation in the U.S. that is higher than the Fed would like. At a testimony to Congress last week, Fed chair Jerome Powell said the central bank would begin easing interest rates at some point this year if “the economy evolves broadly as expected.” “But the economic outlook is uncertain, and ongoing progress toward our 2 percent inflation objective is not assured,” Powell noted. Expectations of tighter crude markets in the spring and summer, and a tight global fuel balance amid shipping disruptions and slow new refinery startups could also put upward pressure on the price of diesel, which would lead to an uptick in the price of goods and services, boosting inflation. Gasoline prices may not come to the rescue of President Biden, who doesn’t have much time to convince likely voters that he is doing a good job with the economy. Ahead of Super Tuesday last week, a CBS News/YouGov poll found that 65% of registered U.S. voters rate the economy under President Trump as “good,” compared to 38% of registered voters who think that the economy has been good so far into President Biden’s term in office. Fortunately for President Biden, the election in early November coincides with a seasonal drop in gasoline demand and prices in the autumn.
India achieves 11.6% ethanol blend with petrol in first 4 months of 2023-24
India has achieved an average ethanol blending rate of 11.60 per cent in the first four months of 2023-24 supply year that started from November, against the 15 per cent target set by the government for the whole year. By 2025 supply year, the government has set the target of blending 20 per cent ethanol with petrol. This comes on the back of supplies of 1.8 billion litres of ethanol from both sugarcane-based molasses and also grains from November to February. The government had in December last year banned the use of sugarcane juice and sugar syrup for making ethanol in the 2023-24 supply year. But it has claimed that this ban would not cast a shadow on the blending target. ALSO READ: India’s perpetual sugar glut needs ethanol and export support. Data sourced from private players showed that between November to February, around 57 per cent of the contracted supply of ethanol has been delivered by the sugar mills and distilleries. So, according to industry experts, out of the 8.25 billion litres of ethanol supply tender opened by OMCs, bids equivalent to 5.62 billion litres were received from companies in the first offer (around 69 per cent of the tendered quantity). Of the 5.62 billion litres, around 2.69 billion litres of ethanol was to be supplied by the sugarcane industry, while the balance of 2.92 billion litres was to come from grains. In sugarcane-based molasses, around 1.35 billion litres would have come from sugarcane juice and 1.30 billion litres from B-heavy molasses, while a very small quantity from 0.04 billion litres from C-heavy molasses. Ethanol is produced largely from sugarcane-based molasses or grain-based sources as feedstock in India. In sugarcane, it is either through sugarcane juice or syrup, then B-heavy molasses and C-heavy molasses. There is a different procurement price for ethanol produced from each source.’