Disgruntled discoms plan to go to court
The latest policy directives issued by the Delhi government coupled with delay by the Delhi Electricity Regulatory Commission’s (DERC) in notifying the new Multi-Year Tariff (MYT) order has left the city’s power distribution companies a disgruntled lot. After the penalty scheme for unscheduled power cuts, the discoms are now miffed at the government’s latest directive to DERC seeking discoms to pay 10 times the compensation amount to consumers for falsely charging them with power theft. “At first it was the amnesty scheme of the government, which was extended thrice. During that scheme, although the three discoms earned Rs. 83.22 crore through resolution of grievances, we had to shell out much more in the form of waivers given to consumers. This amounted to over Rs. 100 crore. Now, we hear about this new policy of compensating consumers 10-times more than the usual amount,” said a discom official. Meanwhile, the delay in notifying MYT regulations is pushing the process of this year’s tariff revision by the DERC. What is also worrying the discoms is that the regulator is unlikely to make an upward revision in tariffs this year. “Our regulatory assets until last year only had climbed up to Rs. 25,000 crore. And this year power demand has been more than 6,000 MW on more than one occasion. Non-reflective tariffs have resulted in incurring losses,” explained an official of another discom. The discoms also highlighted the penalty scheme introduced by the DERC in May this year. “Although the order has been issued. It can be implemented only if the final gazette notification comes. Once it comes, it is likely that the discoms will fight it in the court,” said a source in the discoms. They have also demanded equal penalty clauses for failure on the part of the Delhi Transco limited (DTL), which is under the Delhi government. Patrik Nemeth Jersey
Eight Arunachal districts likely to face power crisis
Heavy landslides triggered by incessant rains in Arunachal Pradesh have damaged Ranganadi-Ziro transmission line at tower no 12. which is likely to cause power shortage in eight districts. Ziro-based Power Grid Corporation of India Ltd (PGCIL) Chief Manager Nani Kojin said that the likely shutdown of the 132 kv transmission line could be for at least 15 days from the date of notice, to be issued shortly. The districts likely to be affected are Lower Subansiri, Upper Subansisri, Kra Daadi, Kurung Kumey, East Siang, West Siang, Upper Siang and some parts of Papum Pare. During the shutdown period, all feeder districts would have to make alternative power arrangements from their own ends, he said. The districts may face power supply problem without any intimation in the event of casualty like collapse of the transmission tower due to unpredictable bad weather condition despite best effort being made by the agency to shift the tower, he said. Tower no 12 located at Hoj-Potin area of 132kv Ranganadi-Ziro transmission line is in a vulnerable condition since long due to the road widening activities carried out by PWD (Highway) for the construction of Trans Arunachal-Highway. Meanwhile, restoration work is going on in war footing for immediate shifting of the tower to safer location and to avoid power interruption to the eight districts. The Power Grid has sought the cooperation of the people and administration to bear the inconveniences and provide all necessary administrative support in case of any emergency needs. Shelby Miller Authentic Jersey
After Air Pegasus, Air Costa cancels flights
Air Costa today cancelled all its flights since morning but said that the airline will restart operations tomorrow. The airline, in an email statement, said that the cancellation of lights is only for 24 hours due to unresolved issues with aircraft lessor. “From Tomorrow (5-08-2016), we will start our operations as scheduled. We are resolving the issues we have with lessors. We are very positive about our operations and future expansions. There are absolutely no issue regarding salaries in Air Costa,” said Kavi Chaurasia, Vice President – marketing for Air Costa said in an email statement. Flight cancellation by the Vijaywada-based airline raises concerns over the viability of regional airlines in India, as it follows flight cancellations by Bengaluru-based Air Pegasus recently. Air Costa is currently the largest regional airline in the country and operates 24 daily flights with 3 E190’s. The airline also has plans to induct new aircraft as it awaits approvals for a PAN India license from the Directorate General of Civil Aviation. Kevan Miller Authentic Jersey
Airlines cancel/reroute flights to Dubai on part runway closure
Budget carriers IndiGo and SpiceJet cancelled their flights to Dubai while Jet Airways and Air India re-routed and clubbed their as the airport partly shut operations following a crash landing and explosion of an Emirates flight on Wednesday. “Due to unavailability of runway at Dubai airport, all IndiGo flights operating to and fro India stands cancelled for August 4, 2016,” said IndiGo in a statement. “From August 05 till 0730 IST August 07, 2016 – limited flights will be allowed to operate from Dubai airport,” it added. SpiceJet too cancelled its flights. Spokespersons at Jet Airways and Air India said their flights are being re-routed to Sharjah. The Jet spokesperson also said it has clubbed some of its flights from Mumbai into one operated by the widebodied Airbus A330 plane. Operation of Code C aircraft and below (Boeing 737/Airbus A320 and below ) are not being allowed at Dubai airport till tomorrow morning. This follows the crash landing of Emirates Trivandrum-Mumbai flight EK521 on the Dubai airport. The aircraft caught fire after landing and all passengers were evacuated. A fireman died in the incident. Thomas Chabot Authentic Jersey
Detailed feasibility study underway for setting up of Mega Oil Refinery on west coast of Maharashtra
he Petroleum Minister Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Oil PSUs namely Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have announced the plan to jointly set up an integrated refinery-cum-petrochemical complex with a refining capacity of 60 MMTPA (million metric tons per annum) in 2 phases in Maharashtra. Engineers India Limited (EIL) is carrying out detailed feasibility study. Oil PSUs and EIL are in the process of site selection for the refinery in consultation with Govt. of Maharashtra. Setting of operationalisation targets depend on land availability, environment clearance etc. David Pastrnak Womens Jersey
How will GST impact India’s energy sector?
India is likely to soon approve a key legislative change required for the implementation of the much-awaited Goods and Services Tax (GST) regime. The Goods and Services Tax law seeks to subsume all central and state levies and is being debated in the Upper house of Parliament. Currently, while the centre is constrained from levying taxes on goods beyond the point of manufacturing, state governments cannot levy taxes on services. Thus, an amendment in the constitution is needed to simplify and unify the indirect tax structure. According to Morgan Stanley, implementation of GST will be one of the most significant reforms affecting all factors of production and economics. One of the main energy sub-sectors to be impacted post the implementation of GST is renewables. The sector currently enjoys various fiscal incentives like 100 per cent tax holiday on earnings for 10 years, concessional excise and custom duties and so on. All these incentives will come to an end in the new GST regime. The indirect tax reform through the GST could, therefore, hike renewable energy costs and pricing and hit investors. The Ministry of New and Renewable Energy (MNRE) has worked out a possible scenario of these impacts. The GST’s effect on cost of setting up of renewable projects would vary across segments, MNRE said in a recent report. The impact includes a 16-20 per cent rise in Solar Off Grid costs; 12-16 per cent rise in Solar PV Grid installations and a 11-15 per cent jump in the cost of setting up wind energy projects. Also, biomass projects could see their costs rising by 11-14 per cent while setting up small hydro projects could become costlier by upto 11 per cent. Analysts also expect some negative impact of the new taxation regime on the oil and gas sector even as consumption, logistics and industrial manufacturing could get a fillip. As per brokerage Motilal OSwal, GST is likely to benefit the light electrical sector on reduction of tax rates. “Overall, GST should be positive for the sector, since it lowers the effective indirect taxes to around 18% from the current 29-30%. We believe GST will be more positive for the Light Electricals segment, where companies may benefit from volume growth and margin expansion,” Motilal Oswal said in a report. It further said for industrial capital goods, the benefits will be passed on to customers owing to the current weak demand scenario. Zach Cunningham Authentic Jersey
India’s July Iranian crude imports surge 21% to five-month high
India’s July oil imports from Iran rose by over a fifth from June, surging to its highest level in five months as two state-run refiners resumed shipments from Tehran after a gap of years, preliminary tanker arrival data obtained by Reuters show. Hindustan Petroleum Corp and Bharat Petroleum, India’s second- and third-biggest state-owned refiners respectively, halted Iranian oil imports after western sanctions against Tehran’s nuclear programme barred insurance cover for plants processing Iranian oil. India shipped in 461,000 barrels per day (bpd) of Iranian oil in July, nearly a 21 per cent increase from June and more than double than the about 215,000 bpd imported a year ago, tanker arrival data and ship-tracking services on the Thomson Reuters terminal show. India’s oil imports from Iran for the fiscal year that began in April are set to surge to a seven-year high, with the nation’s state-owned and private refiners together buying at least 400,000 bpd. While BPCLBSE -1.24 % previously took an oil cargo from Iran in November 2011, HPCL last imported oil from the country in May 2013, according to data available to Reuters. For the first seven months of 2016, India imported about 359,000 bpd of Iranian oil, up 67 per cent from the same period a year ago, the data showed. In April to July, the first four months of the current fiscal year, India’s Iran oil purchases rose about 43 per cent to 404,000 bpd from about 283,000 bpd in the same period a year ago, the data showed. Indian Oil Corp, the country’s biggest refiner, was the top buyer of Iranian oil in July, shipping in about 158,000 bpd oil, while Essar Oil slipped to the No. 2 position with 126,300 bpd, the data showed. Since a landmark nuclear deal was reached with major powers in 2015 leading to the lifting of sanctions, Iran has been planning to boost crude production and exports to the pre-sanction levels. Imports of Iranian oil by four major buyers in Asia in June jumped 47.1 per cent from a year ago to the highest level in more than four years. Marian Gaborik Authentic Jersey
Indian Oil Corp to import gasoline until year-end: Sources
India’s biggest refiner Indian Oil Corp will continue to import gasoline until at least December due to a heavy maintenance line-up and the slow start-up of a key unit at a new refinery, sources with direct knowledge of the matter said. The Fuel trader said they had expected IOC to stop importing gasoline and halt naphtha exports once a unit involved in the production of the motor fuel started up at the 300,000 barrel-per-day refinery in Paradip on India’s northeast coast. IOC started up the Paradip plant last year and is still commissioning some units. In March, it commissioned Paradip’s continuous catalytic reformer (CCR), which uses naphtha as a feedstock to produce reformate, a product used to make gasoline. “The CCR was functional for a week (and) after that there was a problem with the compressor,” said one of the sources. It is not clear when the CCR will start back up, and IOC did not respond to a request for comment. The refiner – which has handled most of India’s gasoline imports in the surge of shipments that started in April of last year – has kept taking gasoline to fill the domestic supply gap, putting out a recent tender seeking up to 30,000 tons (255,000 barrels) of the fuel for an Aug. 5-7 delivery. India’s overall gasoline imports hit a peak in May at 160,000 tons, highest since June 2015, before falling to 40,000 tons in June of this year, according to official data. Little impact on market India’s imported volumes, however, have not had a significant impact on the Asian market, because there have been ample supplies of gasoline since February this year due to high refinery throughput. One result from the slow refinery start-up is that IOC started exporting naphtha from Paradip in January, starting with a small monthly volume of 17,000 to 19,000 tons. The naphtha export volumes have since grown more than five-fold to about 107,000 tons for August loading, adding pressure on a market that is already oversupplied. That has prompted Indian premiums on naphtha cargoes to flip to discounts and pulled spot prices on a cost-and-freight (C&F) basis to depths not seen in more than a year. State refiners – which control India’s retail oil market – typically buy fuel from private refiners Reliance Industries Ltd and Essar Oil or import them to meet their shortfalls. India’s fuel demand has been surging over the past 1-1/2 year, driven by a growing appetite for gasoline-guzzling vehicles. Disputes over the terms of purchase, however – such as which party will absorb sales tax and freight costs – often push the state refiners to look for overseas suppliers. Potentially further boosting IOC’s imports of gasoline or other fuels is a long list of maintenance plans or work relating to fuel upgrades stretching from August to early 2017. Cody Parkey Authentic Jersey
Petroleum Ministry asks FinMin to consider reduction in oil cess
The Ministry of Petroleum and Natural Gas has asked the Ministry of Finance to consider a reduction in the cess levied on hydrocarbon exploration and production companies for producing crude oil. This was stated by Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum and Natural Gas, who was speaking at a seminar organised by industry chamber Assocham. “Government had changed the method of cess calculation to an ad-valorem basis in the budget…However, in-principle I do agree with the industry that the cess should be in accordance with the dynamics of the market. Therefore, I have recommended to the Finance Ministry for looking into the demand of the industry in this regard,” said Pradhan. Earlier at the event, D K Sarraf, Chairman and Managing Director of ONGC, said, “Cess is still high. We are hopeful that the amount of cess comes down. It was made ad-valorem but the percentage is still too high and I would like the government to consider a reduction.” From a fixed amount of ? 4,500 per ton, which translated to around $9 per barrel in February 2016, the government had changed the cess calculation to 20 per cent on an ad-valorem basis. At the time, the cess was working out to be $6 per barrel. The Oil Industry (Development) Act provides for a cess as duty of excise on indigenous crude oil. This is a production cess, and has to be borne by the producers as it is not a pass through. Darius Slay Authentic Jersey
Plan to monetise National Highways to fund road construction projects on Cabinet table today
With Nitin Gadkari setting a huge target of building 100 km of roads per day, his Ministry of Road Transport and Highways has proposed that a bulk of the money required for construction, especially the Bharatmala project, be raised through monetisation of public funded national highways projects. In a proposal to be taken up by the Cabinet on Wednesday, it has suggested that toll collection from 75 operational national highways be put on auction for bidding by private firms. These projects have been in operation for at least two years and currently generate toll of Rs 2,700 crore per year. Successful concessionaires would be given toll collection rights for next 30 years in exchange for an upfront payment of a lump sum amount to the government. “We are looking at a revenue mop up of about Rs 80,000 crore,” said sources. The proposed Toll-Operate-Transfer (TOT) bidding would be for 75 projects that were completed under the engineering, procurement and construction (EPC) route where the government provided the money and a developer executed the project. The idea is to generate immediate resources while ensuring that operation and maintenance of constructed highways is more efficient. “The private sector is also better in terms of toll collection,” they said. Operation and maintenance has been a concern area because of staff limitations of the National Highways Authority of India. Moreover, it’s a global practice to hand out O&M, including tolling rights, to private sector after completion and stabilisation of projects. “The existing operation-maintenance-transfer model works only for the short term, say 6-9 years, and the proposed transfer would ensure that O&M obligation of these roads would lie with the concessionaire until the end of the term,” sources added. India plans to develop road projects spanning 50,000 kms and entailing investments of about $250 billion over the next five to six years. Prime Minister Narendra Modi has put infrastructure development, mainly road construction, on top of his agenda. Sheldon Richardson Jersey