Mahindra May Start Plane Sales, Manufacturing in India This Year
The aerospace unit of Mahindra & Mahindra Ltd plans to sell planes built by its Australian unit in India this year, a top company executive said. Mahindra may also consider manufacturing the planes in India if sales pick up. “We are hoping that (regulatory) approvals will come this year; so once approvals come this year, we will start selling the planes in India,” said S.P. Shukla, chairman, Mahindra Aerospace Pvt. Ltd, part of the $17.8-billion Mahindra Group, at an aerospace summit on Wednesday. In 2008, Mahindra bought Australia’s GippsAero, which makes the eight-seater GA8 Airvan close to Melbourne. About 220 of these planes are flying in 30 countries. Shukla explained why the plane continues to be made in Melbourne. “In Australia, there was a standard of CASA (Australian aviation regulator); CASA has a reciprocal arrangement with FAA (US aviation regulator) in the US, which has a reciprocal arrangement with Europe. And therefore, it makes sense if you have approvals in Australia to continue assembling in Australia,” he said. The next step could be to make in India. “After we start selling the plane in India, we will definitely look at the possibility of making also,” he said, adding some parts of the plane were already made in Bengaluru and supplied to the Melbourne facility. Aircraft certifications are tough to get and without them, it’s difficult to find buyers. Julian Edelman Authentic Jersey
Rising oil import costs may become Asia’s growing pain
A widening gap between Asia’s oil production and demand is creating a growing capital drain for the region and leaving countries vulnerable to global supply disruptions and a sudden surge in oil prices. Asia’s net oil imports surpassed the total amount of oil consumed in North America in 2015 and are set to rise after producers slashed spending on exploration and production on low oil prices, leaving oilfields at risk of sharp production declines in the next decade. Activities across Asia-Pacific to search for energy resources have nearly ground to a halt in the past year while recent exploration finds have struck more natural gas than oil, analysts said. As Asia’s net imports grow and crude prices recover, the region’s oil import bill is set to climb back above $500 billion in 2017 for the first time in three years, calculations based on forecasts by the International Energy Agency and a Reuters crude oil price poll in August showed. “With demand growth set to continue and outpace declining domestic production, this leaves Asia increasingly vulnerable to rising prices,” said Energy Aspects analyst Virendra Chauhan. FALLING OUTPUT The oil price slump since mid-2014 had given Asian economies a breather from high import bills. But oil demand in the Asia-Pacific is expected to grow by 800,000-900,000 barrels per day (bpd) this year and next, while the region’s output could shrink by 240,000-330,000 bpd during the same period, Chauhan said. The gap between oil production and demand has jumped over 30 percent since 2010 to an estimated 25.7 million bpd in 2016 and is set to grow by another 1.1 million bpd next year. Rising oil prices, however, means the cost could soar by a third in just one year to $566 billion. “We have seen two years in a row in 2015 and 2016 oil investments declining,” International Energy Agency (IEA) chief Fatih Birol said. “This would mean oil security and oil markets may face a challenge as a result of a huge drop in the investments in a very few years in the medium term.” Producers across the region are struggling, which is not being helped by international oil companies’ capital and expertise leaving the region, said Chauhan. Consultancy Wood Mackenzie expects Asia’s oil production to fall to 5 million barrels per day in 2025 from 7.6 million bpd in 2016. “We’ve seen a number of projects delayed – some cancelled – plus the level of investments in existing oil fields is falling,” Angus Rodger, director of Asia-Pacific upstream research at Woodmac said. “That has a minor impact in the short-term, but if you go out to 2020, it means oil production across the region will have declined significantly.” China is leading the decline, with output hitting a five-year low in July as producers shut-in marginal fields while imports hit a record. Indonesian officials said they are looking at ways to shore up a production target of 780,000 bpd in 2017, the lowest since 1969 and 40,000 bpd lower than 2016’s forecast. “We are discussing how to make Cepu block production higher than now,” Director General of Oil and Gas Wiratmaja Puja said, adding that output at the oilfield operated by Exxon Mobil may increase by 15,000 bpd. Indonesia, the largest oil producer in southeast Asia, faces a potential 20-25 percent natural decline in production unless it steps up activities such as drilling and well servicing, said Muliawan, deputy for operations at regulator SKK Migas. MIDEAST SUPPLY IMPASSE China, Indonesia and India have been actively investing in overseas oil production assets to supplement domestic output. China has also been broadening its sources of supply, taking more oil from Russia and Latin America to reduce its dependence on the Middle East, as well as building its strategic reserves to cushion itself in the event of an oil price shock. The region’s biggest oil consumer is also turning to gas and renewable energy, but these are long-term solutions. Asia imports just over half of its oil from the Middle East and will continue to rely heavily on Gulf producers, analysts said, exposing the region to geopolitical risks that have disrupted oil production and exports. “Asian production is on the decline, notably among others in China, and with increases in refining capacity that are unlikely to remain idle, the dependency of the region to Middle Eastern oil will remain,” BNP Paribas Global Head of Commodity Markets Strategy Harry Tchilinguirian told the Reuters Global Oil Forum. “It is, as you can imagine, hard to replace Saudi Arabia in your import mix for many an Asian refiner.” Tracy Mcgrady Womens Jersey
India to carry petroleum products via Bangladesh
The Indian Oil Corporation Limited (IOCL) will transport petroleum products from the northeastern state of Assam to Tripura through Bangladesh from September 7, an official said here on Sunday. The official said the arrangement was due to the difficulties faced in carrying petrol and diesel through the Indian roads of the region. The IOCL under the Ministry of Petroleum and Natural Gas of the Indian Government and the Roads and Highways Department (RHD) of the Bangladesh government had signed Memorandom of Understanding (MoU) in lieu of this in Dhaka on August 18. “If the passports of the officials and truckers of IOCL were received by Tuesday, the transportation of the petroleum products from Assamto TripuraviaBangladeshwould start from September 7,” an IOCL official said. He said Indian oil tankers carrying petroleum products from Bongaigaon (northern Assam) will ply on the Dawki border (Meghalaya)- Tamabil (Bangladesh)- Chatlapur (Bangladesh)- Kailasahar (north Tripura) route covering a distance of 136 km in about four hours. “This new route via Bangladesh would save time and costs in carrying petroleum products from Assam to Tripura as the existing over 400 km mountainous route required more than ten hours to carry these essential items. Besides, the condition of national highways through Meghalaya and southern Assam is horrifying,” the official added. The short-term India-Bangladesh deal on shipping of the petroleum products is valid till September 30. An official statement of the Indian High Commission in Dhaka said based on the request by the Indian government, Bangladesh has granted permission for the movement of petroleum goods on humanitarian grounds through their territory. The MoU will facilitate India to carry petroleum goods (Motor Spirit, High Speed Diesel, Superior Kerosene Oil and Liquefied Petroleum Gas) from Assam to Tripura through Bangladesh territory to make a buffer stock of them in the northeastern state. Bangladesh had earlier allowed India to carry food grains and heavy machineries from different parts of India to northeastern state of Tripura via Bangladesh. The Food Corporation of India(FCI) has transported a fresh consignment of 2,350 tons of rice last week from Kolkata to Tripura via Bangladesh to avoid transportation hitches through the traditional route of Assam and Meghalaya. Earlier in 2012, Bangladesh had allowed state-owned Oil And Natural Gas Corporation to ferry heavy machinery, turbines and over-dimensional cargoes through Ashuganj port for the 726-MW Palatana mega power project in southern Tripura. There is only a narrow land corridor to the northeastern region through Assam and West Bengal that passes through hilly terrain with steep gradients and multiple hairpin bends, making plying of vehicles, especially loaded trucks, very difficult. Agartala via Guwahati is 1,650 km from Kolkata by road, and 2,637 km from New Delhi. But the distance between Agartala and Kolkata via Bangladeshis just 620 km. Justin Hunter Womens Jersey
Inventory gains boost oil marketing companies in June quarter
While the June quarter was supported by strong inventory gains, a similar support in the current quarter is unlikely, according to some analysts. State-run refining and marketing companies (OMCs)—Bharat Petroleum Corp. Ltd (BPCL), Indian Oil Corp. Ltd (IOC) and Hindustan Petroleum Corp. Ltd (HPCL)—have all delivered strong June quarter results. A key reason why these companies were able to perform better is the fact that they reported a better gross refining margin (GRM). For the quarter, the measure for IOC, HPCL and BPCL stood at $9.98 a barrel, $6.83 a barrel and $6.09 a barrel, respectively. GRM is a measure of profitability for refining companies. In general, GRMs of refining companies were expected to get a boost from inventory gains, thanks to the rising oil price trend over the quarter. That has panned out. Spark Capital Advisors (India) Pvt. Ltd says, adjusted for refining inventory gains, the GRMs for these companies were in the range of $4-5 a barrel. That’s not very impressive. Nevertheless, the results beat street expectations. IOC’s operating profit increased by one-third, compared with the same period last year to Rs.136.83 billion. HPCL’s operating profit increased 17% year-on-year to Rs.36.27 billion, while BPCL’s operating profit increased at a much slower pace of 3% to Rs.39.19 billion. Reported net profit of IOC, HPCL and BPCL increased 25%, 30% and 11%, respectively, to Rs.82.69 billion, Rs.20.98 billion and Rs.26.20 billion. What next after a great quarter? Investors in these stocks have little to complain. Higher visibility on profits thanks to reforms in the sector, benefits from lower crude price and robust demand have helped sentiment. So far this year, shares of these companies have outperformed the Sensex meaningfully. Currently, BPCL, HPCL and IOC trade at 11 times, nine times and 10 times estimated earnings for this fiscal year. Even as valuations do not appear demanding, the outlook isn’t the brightest. Spark Capital believes OMCs’ earnings have peaked out in fiscal 2016 and sees risks to 2HFY17/FY18E earnings. Some factors that pose risks, according to the brokerage, include weaker GRMs and narrowing of trade discounts offered by West Asian suppliers—hitting GRMs and normalization in marketing margins of auto fuels. Further, while the June quarter was supported by strong inventory gains, a similar support in the current quarter is unlikely. In fact, it is possible that the June quarter ends up being the best quarter for this year. Given this and the sharp run-up in the stocks, upsides in the OMC stocks could be capped. Keith Magnuson Jersey
IOC plans to double refining capacity by 2030
Indian Oil Corp (IOC), the nation’s largest oil company, plans to nearly double refining capacity to 150 million tons by 2030 to meet fast expanding energy needs of the country, its Chairman B Ashok said. The company has capacity at refineries to produce 80.7 million tons per annum of fuel currently. “IOC is self-sufficient in the refining segment, but keeping in view the rising demand for petroleum products in the short-term, we are aiming at a refining capacity of about 100-110 million tons per annum by the year 2022 and progressively scale it up to at least 150 million tons by the year 2030,” he said. International Energy Agency’s World Energy Outlook projects 4 per cent CAGR growth in India’s fuel demand to 348 million tons by 2030, from 184 million tons in 2015-16. BP projects demand to be 335 million tons while EIA has pegged it at 294 million tons, which translates into a CAGR of 3 per cent. India has a refining capacity of 232.06 million tons. “Our core business is liquid fuels, LPG, lubes, petrochemicals and natural gas. With the prognosis that fossil fuels will continue to dominate the energy mix till the year 2040, we have a fairly large window of opportunity to profitably expand in our core business while at the same time getting ready for the low-carbon economy of the future,” he said IOC will expand its refining capacity to 104.55 million tons by 2022 from the current 80.7 million tons per annum with an investment of about Rs 400 billion. It is looking to scale up its Koyali refinery in Gujarat to 18 million tons from 13.7 million tons while capacity of the Panipat refinery in Haryana will be raised by a quarter to 20.2 million tons from the current 15 million tons. A 3-million tons capacity addition each is planned for Uttar Pradesh’s Mathura and Bihar’s Barauni refineries, which will take their capacity to 11 million tons and 9 million tons, respectively. The recently-commissioned 15 million tons Paradip refinery in Odisha will see a capacity addition of 5 million tons while about 3 million tons will be added in IOC’s Digboi and Bongaigaon refineries in the North-East. He, however, did not give details of the expansions that will take the capacity to 150 million tons. Ashok said IOC is also expanding its pipeline and retail network. “We have 45,000-plus customer touch points as of now and this number will go up further in the next five years, especially in rural and virgin markets in order to secure the first mover advantage,” he said. Also, a Strategy Cell has been set up, which is preparing roadmaps for future growth of IOC as an energy business amid multiple scenarios, he added. Max Pacioretty Womens Jersey
Government engaged in phase two of strategic oil reserves
With global crude oil prices having dropped to under $50 barrel levels amid a supply glut, the Indian government has been giving attention to developing the country’s strategic petroleum reserves for enhanced energy security. Earlier this week, Petroleum Secretary K.D. Tripathi, along with senior officials of state-run Indian Strategic Petroleum Reserves Ltd (ISPRL) and Engineers India Ltd (EIL), visited the proposed petroleum storage site at Chandikhol in Odisha, a Petroleum Ministry statement here said. “The underground storage facilities at Chandikhol will be created within the available government-owned land parcel, and would involve a significant development in the region with the greater objective of Odisha becoming the energy gateway of the Eastern and Northeastern region of India,” the statement said. “The estimated capital cost of the Chandikhol project is approximately Rs 50 billion,” it added. The first phase of implementing India’s strategic oil reserves would be completed by end of this fiscal with over 5 million tons (MT) of crude reserves in place in three separate storage facilities. The facilities entail storage of crude oil in underground rock caverns. “Under Phase I storage program, three facilities have been created at Vishakhapatnam, Mangalore and Padur, with a total storage capacity of 5.33 MT,” the ministry said. Petroleum Minister Dharmendra Pradhan had told reporters earlier this year that preparations had started for the second phase of construction where it is planned to build reserves of 12.5 MT, so that by the end of the second phase India has strategic reserves of around 17.8 MT. “Government is considering the proposal for establishment of Phase II storage program for a total storage capacity of 10.0 MT, which includes 4.4 MT storage capacity at Chandikhol and 5.6 MT storage capacity at Bikaner (Rajasthan),” the ministry said in a statement on Saturday. India imports nearly 80 percent of its oil requirements, and the government had decided to set up strategic crude oil storages as a cushion against external supply disruptions. These storages would be in addition to the existing ones of the oil companies. The construction of the storage caverns is being managed by ISPRL, which is a special purpose vehicle created by the Oil Industry Development Board (OIDB). Justin Smoak Authentic Jersey
States await Rs 240 billion bounty from excise on oil products’
Indian states await a big boost to their finances this year as they are on course to get an additional Rs 240 billion bounty or more from the Centre by way of the excise duty share on oil products this fiscal year, which is set to jump by around Rs 600 billion. As per the 14th Finance Commission wards, the Centre has to part 42 per cent of the incremental excise mop up on oil products with the states from 2015 through 2020 fiscals. Since the government has been increasing the excise duty on oil products since mid 2014 after the crash in crude prices, it has been biggest contributor to tax kitty. While it contributed as much as 63 per cent of the total excise mop-up last year, up from 46 per cent in the previous year, it is going to jump by around Rs 600 billion this year to Rs 1786 billion. The government has jacked up the basic excise duty on diesel and petrol by Rs 6.5/litre and Rs 7.75/litre, respectively, in four tranches between November 2014 and January 2015. “Excise collections on oil products may expand by an incremental Rs 550-600 billion in the current fiscal year and 42 per cent of these incremental collections would devolve to the states. “This is equivalent to Rs 220-240 billion, which is sizeable in relation to the estimated devolution of excise on fuels of Rs 364 billion in 2015-16, and a positive factor for the states’ fiscal health this fiscal,” Icra’s chief economist Aditi Nayar said in a report. She adds this estimate is contingent on the facts that the basic excise duty on petrol and diesel continues unchanged in the remainder of this year and consumption of these items grows by an average of 5 per cent. The contribution of oil products to the overall excise duty levied by the Centre has increased significantly from 46 per cent in 2013-14 to around 63 per cent in 2015-16, following a high growth rate of excise on fuels in the recent years, the report notes. While the Centre mopped up Rs 794 billion from oil products in 2014-15, 23 per cent of it or Rs 179 billion were devolved to the states in that year. Cory Spangenberg Womens Jersey
Delhi Lost Over INR 9 Cr Because Of Waterlogged Roads And Crawling Traffic In The Past Two Days
Rain is a much romanticised idea in poems and films – a poet writes about his/her longing for thunderous showers and directors shoot scenes of lovers embracing under pouring water. Unfortunately the reality of monsoons, at least in India, brings out rather unromantic emotions in most people, and especially so in those living in urban cities. This year, India has received generous amounts of rain. And this year, like all others, the monsoon was covered extensively by the media and spoken about in copious amounts on social media. And finally, this year, like previous years again, urban Indian cities broke down leading to endless hours of bumper-to-bumper traffic. John Kerry, who was in the country recently, had to cancel three trips to religious sites in Delhi because of rain-delaying-traffic. Chairman of Centre for Public Policy Research, D.Dhanuraj said, “Traffic jams deteriorate quality of life, lead to loss of fuel, lend to pollution, and create environmental and health problems.” Daily commuters face stress on a daily basis because of poor road conditions in urban cities which include Delhi, Mumbai, Bangalore, Kolkata and Chennai. The root of all problems On the last day of August, Delhi-NCR woke up to pouring rain. All was good when you were standing in your balcony with a cup of tea in hand and soaking in the wondrous sight of water – until the woes of traffic began creeping in. On Wednesday, August 31, Delhi’s Dhaula Kuan area and the Ring Road were absolutely packed, and it took people at least three hours to find their way home or to work. It was while sitting in traffic, left foot on the clutch and right on the brake that I began wondering about how much was at stake with every minute wasted in traffic. Here’s the Math Let’s begin with money, because money, after all, is what causes all seven sins to surface. Maruti Suzuki’s ubiquitous Wagon R is one of the most economical cars and gives 20kmpl in mileage. We’re using this car to assume that you’re travelling 40km every day in Delhi’s crawling traffic. In this case, you’re spending an extra 0.4 litres of fuel and an extra Rs. 25.4 than on a normal traffic day. According to Delhi Traffic Police, there are 96,34,976 cars in Delhi. Assuming that nearly 40% of these cars run on petrol, means that the capital is losing Rs. 9.78 crores everyday because of bumper-to-bumper traffic. There are also diesel and CNG cars which make up the other three quarters of vehicles in Delhi, and they also add to monetary losses incurred in Delhi. Even companies lose money for every employee stuck in traffic for hours on hours. If you’re earning INR 20,000/month, which translates to Rs.645 a day and to Rs.27 an hour, then the company is losing Rs.27 for every hour you are stuck in traffic. It was reported by TOI that India loses INR 60,000 crores a year due to traffic congestion – that’s a whopping amount of money lost purely by spending futile time moving a centimeter a minute. Dhanuraj also told Indiatimes, “Metropolitan cities are very dense and no new cities are coming up. There are only a few cities to migrate to and they are no longer empowered to absorb more people.” Is there a solution? The Centre for Science and Environment talked about the health implications of congestion and said “a large number of studies are now available that show exposure to vehicle exhaust causes significant increase in respiratory symptoms and lung function impairment, cancer and other ailments. “And congestion further aggravates emissions. Low average speed due to traffic congestion increases the emissions due to the stop-and-go pattern of traffic flow in congested condition.” Paramita Dey, Senior Research Officer and Team Leader at the National Institute of Urban Affairs, told us, “One of the major causes of traffic jams in our cities during monsoon is because of problems associated with the drainage cities. Many of our cities don’t have proper drainage systems, and those that do are either choked with solid waste or not cleaned at all.” She also said that constantly shifting gears and driving at a low speed wastes fuel but “air pollution is less during the monsoon as rain settles particles” but water pollution is increased. These problems, Dey added, can be solved if the management in charge cleans the drains before the onset of the monsoon season. The solution to solving India’s yearly problem that comes hand in hand with the monsoon is not only to fix pot-holed roads but also the drainage system. Dhanuraj said that currently there are multiple authorities managing Indian roads that are “breathing corruption”, hence the roads remain unfixed and the drains clogged.
CESC begins power distribution in Rajasthan at Kota
The Rs. 17,000 crore RP-Sanjiv Goenka Group, on Thursday said, it has begun its electricity distribution operation at Kota in Rajasthan. Aniruddha Basu, managing director at The Calcutta Electric Supply Corporation (CESC) said in Kota, two wholly-owned subsidiaries of CESC Rajasthan Limited have been formed for electricity distribution in Kota and Bharatpur for a period of 20 years. According to A.N. Singh, CEO of CESC Rajasthan, the Kota distribution franchise is spread over 150 square kilometres and has 1.76 lakh registered consumers which grew seven per cent during 2014-15 as compared to the previous fiscal year. “At Kota we will follow CESC’s customer-centric initiatives to provide best-in-class services to power consumers by developing and modernising the city’s distribution systems”, Basu said in a statement. He said that citizens of Kota will be provided with immediate new connections and they will benefit from the proactive complaint management from CESC which currently has more than 3 million consumers in its licensed area in Kolkata and adjacent area. Shaun Livingston Jersey
Benefits under Pradhan Mantri Ujjwala Yojana extended to people of all Hilly States including North-East States by treating them as ‘Priority States’
Ministry of Petroleum and Natural Gas has decided to extend the benefits under Pradhan Mantri Ujjwala Yojana to the people of all Hilly States including North-East States by treating them as ‘Priority States’ and release LPG connections to the eligible beneficiaries. This step of the Ministry will effectively address the difficulty faced by poor people residing in the States of Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Sikkim, Assam, Nagaland, Manipur, Mizoram, Arunachal Pradesh, Meghalaya and Tripura in accessing LPG for cooking purposes. Pradhan Mantri Ujjwala Yojana is being implemented with an objective to provide deposit free LPG connections to BPL households as a clean fuel solution. So far, more than 50 lakh connections have been released to the beneficiaries. Brice McCain Jersey