Will Doubling Down On Cheaper Russian Oil Help India Tackle Inflation at Home?
Even as Russia is offering deep discounts on its crude oil supplies, India is looking at buying more oil from the country which may help ease inflation in India. The development gives Indian refiners better bargaining power with price-setter Saudi Arabia and also reduces India’s dependence on West Asian oil. It will also help control inflation in India as cheaper crude will reduce the petrol and diesel prices in India, thus bringing down the overall inflation. How Much Crude Oil India Imports? India’s import bill nearly doubled to $119 billion in the financial year 2021-22. During the previous financial year, India had spent $62.2 billion on oil imports, according to data from the oil ministry’s Petroleum Planning & Analysis Cell (PPAC). The country imported 212.2 million tonnes of crude oil in 2021-22, a significant jump as compared with 196.5 million tonnes a year ago. After Russian President Vladimir Putin approved a special military operation in Ukraine’s Donbass region on February 24, the Brent crude oil prices hit USD 100 per barrel for the first time since 2014. In the following days, the US’ West Texas Intermediate crude futures even skyrocketed to $130.50 a barrel, its highest since July 2008, before retreating. Brent also hit a high of $139.13, also its highest since July 2008. From Russia, The country bought just 12 million barrels of the oil in the whole year 2021, which was only 2 per cent of its total imports. India’s own domestic production is more than that. However, it increased after discounts, Russian oil arrivals into India for May were at 740,000 barrels a day, up from 284,000 barrels in April and 34,000 barrels a year earlier, according to data from Kpler. How Will It Help India? With over 80 per cent of India’s oil requirement being met through imports, rates in the international market affect the country at a significant level in terms of the import bill. Cheaper oil helps the country in controlling overall inflation. Brent crude oil prices hit $120 a barrel on Monday after Saudi Arabia raised crude prices for July. Russia offered as much as $35 per barrel discounts on the crude oil prices in April. The Reserve Bank of India has said if the crude price rises 10 per cent above the baseline of USD 100 per barrel, domestic inflation could increase even further. Currently, the retail inflation is already high at 7.79 per cent in April, which is the highest in eight years. Oil at discounted prices will bring down petrol and diesel prices further which are also running high. India consumed 202.7 million tonnes of petroleum products in the 2022 financial year, up from 194.3 million tonnes in the previous year. On buying oil from Russia amid boycott by the International community, India’s External Affairs Minister S Jaishankar said, “Buying Russian gas is not funding the war, why it’s only Indian money and fund coming from India and not gas coming to Europe which funds war, let’s be even-handed out here.”
Swan Energy to commission first floating LNG unit
Nikhil Merchant-owned Swan Energy Ltd is planning to commission India’s first FSRU (floating, storage and regasification unit) liquefied natural gas port near Jafrabad in Gujarat this year, as the country looks to boost its LNG imports. The FSRU with a capacity of 5 million metric tonnes per annum (mmtpa) has been built at a cost of around ₹65 billion. “We’re expecting the country’s LNG terminals to have a capacity of about 60 mmtpa in the next eight to 10 years. India, along with China and other countries, has to move towards a greener source of fuel. LNG, is the future’s fuel,” said Vivek Merchant, general manager – projects at the company. Swan has signed regasification agreements including with Gujarat State Petroleum Corporation, FSRU is a vessel that helps in transferring LNG through oceanic channels. The natural gas that is transported through the sea in liquid form needs to be reconverted into the original gaseous state before being pumped out into the storage tanks, and the FSRU helps in this process. The port which was to be commissioned in 2019 was delayed due to two cyclones – Vayu and Taukate – in the region and Covid-19 pandemic.
India in Talks to Increase Russian Oil Imports From Rosneft
India is looking to double down on its Russian oil imports with state-owned refiners eager to take more heavily-discounted supplies from Rosneft PJSC as international buyers turn down dealings with Moscow over its invasion of Ukraine. State processors are collectively working on finalizing and securing new six-month supply contracts for Russian crude to India, said people with knowledge of the companies’ procurement plans. Cargoes are being sought on a delivered basis from Rosneft, with the seller set to handle shipping and insurance matters, they said. These supply agreements, if concluded, will be separate and on top of shipments that India already buys from Russia via other deals. Details on volumes and pricing are still being negotiated with Indian banks set to fully finance all cargoes, said the people who asked not to be identified as discussions are confidential. Indian refiners will increasingly procure supplies directly from Russian companies such as Rosneft as top international traders like Glencore Plc wind up their dealings, they added. The state refiners include Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum, while private processors are Reliance Industries and Nayara Energy, which is partly owned by Rosneft. Procurement activities for state and private companies are done independently. Spokespeople at the three largest state-owned companies couldn’t immediately comment when contacted. Both state and privately-owned refineries in India have been ramping up purchases of Russian crude as sanctions and trade restrictions rolled out by the US, UK and European Union have caused most buyers to flee and offer levels to crash. An unprecedented amount of Russian crude was heading to India and China last month as European buyers scrambled for replacements and reached as far as the United Arab Emirates for alternatives. The ensuing panic and rerouting of global oil flows have lifted prices by more 20% since late-February when Russia invaded Ukraine. Refiners in Asia’s second-largest oil consumer have been enjoying elevated profits from turning cheap crude into fuels that are sold domestically and also in the export market to customers in Europe and the US. Russian supplies form just part of India’s overall basket of crude oil feedstock, alongside other long-term as well as spot purchases from the Middle East and Africa. The potential ramp-up of Russian crude purchases will likely weigh on the South Asian nation’s spot imports, said the people. India has bought more than 40 million barrels of Russian oil between late-February and early-May, which comes to about 20% more than flows for all of 2021, according to Bloomberg calculations based on trade data. Russian oil arrivals into India for May were at 740,000 barrels a day, up from 284,000 barrels in April and 34,000 barrels a year earlier, according to data from Kpler.
BPCL setback: Govt to push asset sales
The Centre is set to give a fresh push to its privatisation drive after facing a setback over the sale of state-run oil refiner BPCL and will make a renewed bid to complete the transactions of a clutch of companies in the current fiscal year. Senior officials said Shipping Corporation of India (SCI), defence PSU BEML, engineering consulting firm PDIL and the Nagarnar steel plant of the country’s largest iron ore producer NMDC are among the companies where the Centre hopes to accelerate the privatisation process and complete the transactions. Plans are also on the anvil to give a fresh push to the privatisation of a state-run bank and perhaps a state-run insurance company, the process for which had been delayed due to a raft of factors, including the Covid pandemic. The officials said the approval for demerger of SCI was expected anytime soon, and the process for moving ahead with the sale would be stepped up. “The review of the sale process has been undertaken and once the demerger approval comes through, we expect to proceed,” said an official. While the overall situation linked to the shipping industry globally hasn’t improved significantly, the government is hopeful of completing the transaction successfully in the current fiscal year. 92026856 Similarly, the Centre is awaiting the demerger approval for BEML and for the Nagarnar steel plant of NMDC and is confident that once the corporate affairs ministry gives the green light, the transactions can gather momentum. The PDIL sale is also expected very soon, the official said, adding that substantial progress has been achieved so far. The government is also moving ahead with the closure of state-run firms where the sale process has repeatedly met with roadblocks and tepid response. The new guidelines on closure provide enough flexibility to the administrative ministries to proceed with closure of such PSUs that have been on the list of privatisation for a long time. “Different ministries are proceeding with the closure of some of the PSUs which have been on the privatisation list and where the buyer interest has been minimal. Some of them have already been closed down and we hope a few will also be shut down shortly,” said an official. The Covid pandemic has emerged as a major obstacle for the Centre’s privatisation drive and has taken a toll on a number of key stake sales as global travel has been affected. But now the opening-up across the world has triggered hope for accelerating the process. The Centre is confident of meeting the Rs 65,000-crore disinvestment target set for the current fiscal year. So far, it has raised Rs 24,047 crore from asset sales in state-run firms, and residual stake sales in Hindustan Zinc and Paradeep Phosphates are set to bring it closer to the target.
How Close Are We To Peak Oil Demand?
Two years ago, British oil and gas supermajor BP Plc. (NYSE:BP) sent shockwaves through the energy markets after it declared that the world was already past Peak Oil demand. In the company’s 2020 Energy Outlook, chief executive Bernard Looney pledged that BP would increase its renewables spending twentyfold to $5 billion a year by 2030 and “… not enter any new countries for oil and gas exploration”. That announcement came as a bit of a shocker given how aggressive BP has been in exploring new oil and gas frontiers. When many analysts talk about Peak Oil, they are usually referring to that point in time when global oil demand enters a phase of terminal and irreversible decline. According to BP, this point has already come and gone, with oil demand slated to fall by at least 10% in the current decade and by as much as 50% over the next two. BP noted that historically, energy demand has risen steadily in tandem with global economic growth with few interruptions; however, the COVID-19 crisis and increased climate action might have permanently altered that playbook. However, BP has been forced to do a mea culpa after it became clear that the COVID-19 pandemic that began more than two years ago has not resulted in a significant reduction in oil demand. In its Energy Outlook 2022 edition, BP has revised down its forecast for global economic growth saying global GDP will only contract 1.5% by 2025 from 2019 levels compared to its earlier projection of a 2.5% contraction. BP notes that its former grim outlook was prepared prior to the Russian invasion of Ukraine– another black swan event–which has driven global energy prices higher and cast an uncertain shadow over Russia’s oil and gas sector in recent months. The Scenarios In its latest report, BP offers three scenarios–all foresee oil demand surpassing pre-pandemic levels by the middle of this decade before beginning to slip to varying degrees. In the most bullish case for oil, BP projects that crude demand will rise to 101 million b/d in 2025 and remain flat into 2030. After that point, global demand retreats to 98 million b/d by 2035 and to 92 million b/d by 2040. In yet another scenario that BP has termed “net-zero,” which is the most aggressive in terms of global climate ambitions being achieved, the company pegs 2025 demand at 98 million b/d and just 75 million b/d by 2035. BP assumes that a 95% reduction in greenhouse-gas (GHG) emissions must be achieved for the net-zero predictions to come true. In the middle-of-the-road scenario, BP assumes that the world will still be broadly in-line with climate goals but with a 75% reduction in GHG emissions by 2025. This picture of the future suggests that oil demand will be around 96 million b/d in 2025 and 85 million b/d by 2035. However, recent events in the energy sector suggest that oil companies might get a leeway to grow production and even relax climate goals as long as oil and gas prices remain high. Last year, Exxon Mobil (NYSE:XOM) found itself in trouble after a tiny hedge fund by the name Engine No. 1 successfully waged a battle to install three directors on the board of Exxon with the goal of pushing the energy giant to reduce its carbon footprint. Engine No. 1 enjoyed the stunning victory thanks to support from BlackRock, Vanguard and State Street who all voted against Exxon’s leadership. Luckily, Exxon has finally managed to turn the tables and get shareholders on its side: last week, Exxon recorded a major victory after its shareholders supported the company’s energy transition strategy at the annual general meeting. Only 28% of the participants backed a resolution filed by the Follow This activist group urging faster action to battle climate change; a proposal calling for a report on low carbon business planning received just 10.5% support, while a report on plastic production garnered a 37% favorable vote. In other words, it appears that Exxon’s legacy fossil fuel business remains safe, at least for now, as long as it keeps returning that excess cash to shareholders in the form of dividends and buybacks. Just like its bigger peer, Chevron Inc.(NYSE:CVX) shareholders voted on Wednesday against a resolution asking the company to adopt greenhouse gas emissions reductions targets, indicating support for the steps the company already has taken to address climate change. Just 33% of shareholders voted in favor of the proposal, according to preliminary figures disclosed by the company, a sharp turnaround from last year when 61% of shareholders voted to support a similar proposal. Meanwhile, Hess Corp. (NYSE: HES) has broken with the industry trend of returning excess cash flows to shareholders after announcing plans for massive capex spending in a bid to boost production. Hess has announced a 2022 capex budget of $2.6b; good for a 37% jump, with Bakken spend up 75% to $790m. In the Bakken, Hess plans to run three rigs to achieve its 168kb/d production target. Changing Map In yet another report published in the Geopolitical Intelligence Services blog , Carol Nakhle, CEO of Crystol Energy, says the consensus is that global oil consumption will peak within the next 20 years, but demand will not necessarily fall off a cliff thereafter. Nakhle notes that in OECD countries, oil demand peaked in 2005 at around 50 million barrels per day. What has been driving the growth in global demand is the developing world, primarily Asia (mainly China and India – the second- and third-largest oil consumers in the world after the United States) and the Middle East (led by Saudi Arabia, which is also the sixth-largest consumer in the world). In fact, between 2009 and 2019, almost all the growth in global oil demand was driven by the developing world, with Asia expected to continue to be the growth center in the coming years. Non-OECD countries account for ~54% of global oil consumption. Nakhle says, “…after peak oil demand is reached, it
Cairn Oil & Gas to convert Mangala pipeline to solar power by 2025
Cairn Oil & Gas, a unit of mining giant Vedanta Ltd, will convert a pipeline that ships crude oil from its prolific Rajasthan oilfields to Gujarat to solar power by 2025. To commemorate World Environment Day on June 5, Cairn Oil & Gas will convert the Mangala pipeline to solar. It will install solar rooftop PVs in all the 36 Above Ground Installations (AGIs) along the pipeline by 2025, the firm said in a statement. The Mangala pipeline is the world’s longest continuously heated and insulated pipeline that runs from oilfields of Rajasthan to refineries in Gujarat — traversing 705 km. Discovered in 2004, Cairn’s Mangala oilfield in Barmer district of Rajasthan was the largest global discovery of the year and India’s largest onshore discovery in 25 years. The field is also home to the Mangala pipeline — a technology marvel that was built to make the transportation of waxy crude produced from the prolific oilfield a thriving reality. Now, this celebrated pipeline is making the solar switch. ”In line with its decarbonisation commitment to reduce carbon footprint, Cairn is cutting dependence on more polluting sources of power and setting an important precedent in the industry,” the statement said. ”The goal is to shift the complete AGI load to solar energy and make our world’s longest continuously heated and insulated hydrocarbon carrying pipeline a greener and more efficient resource.” Before this, the power for AGI operations in the midstream location in Gujarat was fully imported from the state electricity board and its predominantly coal-based power which comes with a much higher greenhouse gas emission intensity. The firm has already installed a total of 13 AGIs with 15 kilowatt solar rooftop capacity to reduce about 270 tonnes of carbon dioxide emission per year. Further, the plan is to install solar on 10 AGIs each year to complete the project by 2025 and achieve a total reduction of 770 tonnes of carbon emissions per annum. Discussing the company’s initiative to adopt solar power for its celebrated pipeline, Prachur Sah, Deputy CEO, Cairn Oil & Gas, said, ”The Mangala pipeline has been a great asset for Cairn Oil & Gas. Its unique technology has allowed the transportation of waxy crude from our Rajasthan fields to refineries in Gujarat.” Mangala pipeline, he said, has been a testimony of industry leading practices, and now its conversion to solar power is pioneering yet another first for the oil and gas industry. ”We look forward to several more years of successful production from Barmer and the Mangala pipeline will be the backbone of sustaining our ambitions.” At COP 26 last year, Prime Minister Narendra Modi announced that India will achieve net-zero emissions by 2070. In line with the country’s ambitious goals, Cairn Oil & Gas has committed to achieve net-zero carbon by 2050. ”For this, the company has created a robust ESG road map with a slew of diverse initiatives – the first in the country’s oil and gas sector to take this step. In fact, Cairn’s decision to convert its much-celebrated Mangala pipeline into a fully solar-operated pipeline flows from this ESG vision,” the statement added.
India’s Path to Clean Transport is Electric, Strong Central Policies on Zero-Emission Vehicles
Given the lifecycle greenhouse gas emission benefits that battery electric vehicles already provide today, the transition to electric cars need not and cannot wait another decade for additional power sector improvements. Globally, June 5 is the World Environment Day. It was created to raise awareness and spur actions to protect the environment. This year, emissions from transport are a major focus because the sector is responsible for almost a quarter of all greenhouse gas (GHG) emissions in the world. That’s one part of the story. The other part is that the transport sector’s carbon dioxide (CO2) emissions have increased consistently over the year. The transport sector was the second-biggest source behind the energy sector in terms of annual change in CO2 emissions between 2020 and 2021. In India, too, transport is one of the sectors where emissions are growing fastest, and it accounts for around 14% of CO2 emissions, 90% of them from road transport. Therefore, reducing emissions from road transport is vital for achieving the country’s climate goal of achieving net-zero emissions by 2070. So, the big question is: How can India reduce emissions from road transportation? The International Council on Clean Transportation (ICCT) has published a life-cycle assessment of GHG emissions for passenger cars and two-wheelers in India that provides some interesting and relevant insights. The objective of this research was to identify the fuel and power train technologies, which can offer deep carbon-reduction benefits. The study included all GHG emissions from vehicle production, maintenance, and recycling phases, and emissions from fuel and electricity production and consumption. In many ways, the assessment can be considered to have settled the debate over the effective pathways for decarbonizing road transport. Figure 1 illustrates the results for passenger cars and Figure 2 shows emissions for two-wheelers, both in India. Note that the error bars indicate the difference between the development of the electricity mix according to stated policies (the higher values) and what is required to align with the Paris Agreement. Let’s discuss three important takeaways from the analysis: PARIS AGREEMENT GOALS CAN’T BE ACHIEVED WITH INTERNAL COMBUSTION ENGINE Both diesel and natural gas-powered cars exceed the life-cycle GHG emissions of gasoline cars registered in 2021. With a modest share of biofuels in fuel blends (5% to 20% ethanol, and up to 5% biodiesel), the GHG reduction benefits are minimal. While higher biofuel blends could further reduce GHG emissions, the supply of waste- and reside-based biofuel feedstock is highly constrained and is not likely to be enough to substantially displace fossil fuel. Food-based biofuels, on the other hand, not only cause additional emissions from indirect land-use change but can also interfere with food security. The story is the same for trucks. A look at the well-to-wheel (life-cycle) emissions of liquefied natural gas (LNG) trucks shows that they are invariably worse than diesel. This is because methane leakage upstream and downstream offsets any climate benefits offered by natural gas. Different from other GHGs, methane contributes several times more to global warming in the first 20 years after it is emitted than is reflected by the 100-year global warming potential (GWP). ELECTRIC IS CLEANER, EVEN WITH EXISTING GRID IN INDIA Even starting with India’s current grid, which gets almost three-fourths of its electricity from fossil fuels, battery-electric vehicles emit less over their lifetimes than internal combustion engine vehicles. Indeed, electric cars registered in 2021 are estimated to produce 19%-34% fewer GHG emissions than gasoline cars. The emissions reduction in the case of electric two-wheelers is even larger, 33%-50% less than gasoline models. Moreover, the benefits will increase over time. Renewables already contributed almost 11% of the total electricity generated in India in FY 2021–22. With more than 100 GW of installed capacity of renewable energy already today, India is on track to reach 450 GW by 2030. As the grid becomes cleaner, the GHG benefits further increase to 30% in 2030. Notably, the ICCT found that BEVs powered by renewable electricity produce the least emissions, even less than FCEVs powered by green hydrogen. This is because the electricity-based FCEV pathway is three times more energy intensive. Given the life-cycle GHG emission benefits that BEVs already provide today, the transition to electric cars need not and cannot wait another decade for additional power sector improvements. HYDROGEN IS PROMISING, BUT HAS LIMITED APPLICATION Fuel cell electric cars emit about 16% fewer life-cycle GHG emissions than gasoline cars when the hydrogen is produced through reforming methane from natural gas, or “grey hydrogen.” The emission reduction benefits are even better when grey hydrogen is combined with carbon capture and storage (CCS) to create “blue hydrogen,” and highest when produced from renewable electricity, the aforementioned “green hydrogen.” With India’s increasing renewable power portfolio and solar tariffs hitting record low prices, green hydrogen appears promising. However, addressing challenges related to costs and distribution infrastructure will be crucial. It is important to note that the existing CNG infrastructure can be used to transport hydrogen only in small, blended quantities. Thus, the transport of hydrogen would require significant capital investment to create a dedicated pipeline network, and that would be reflected in the at-the-pump price of hydrogen. With declining solar prices and electrolyzer costs, at-the-pump prices of green hydrogen are expected to go down from USD 9/kg in 2030 to USD 5/kg in 2050. Until then, though, this fuel pathway is likely to be limited to heavy vehicle applications that are located near hydrogen production facilities, as that would not require extensive distribution. The ICCT research makes clear that there is no realistic pathway to decarbonize the internal combustion engine in a time frame that is compatible with global climate goals. Only BEVs and FCEVs have the potential to achieve near-zero GHG emissions in the coming decades. Thus, as India charts its future and develops sectoral targets for achieving its net-zero goal, it will need to develop strong central policies that support zero-emission vehicles and phase out internal combustion engine vehicles.
India turns 10% of its petrol green; targets to double it by 2025-26
India has achieved the target of supplying 10 per cent ethanol-blended petrol five months ahead of schedule and is aiming to double the blend by 2025-26 in order to cut oil import dependence and address environmental issues. The original target for doping 10 per cent ethanol, extracted from sugarcane and other agri commodities, in petrol originally was November 2022 but this has been achieved in June thanks to tremendous effort by state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). “Due to the coordinated efforts of the public sector oil marketing companies (OMCs), the target of 10 per cent blending has been achieved much ahead of the targeted timelines of November, 2022 with OMCs attaining an average 10 per cent ethanol blending in petrol (10 per cent ethanol, 90 per cent petrol) across the country,” an official statement said. This, it added, translates into a forex impact of over Rs 415 billion, reduced greenhouse gas (GHG) emissions of 0.27 million tonnes and has also led to the expeditious payment of over Rs 406 billion to farmers. India is the world’s fifth largest producer of ethanol after the US, Brazil, EU and China. Ethanol worldwide is largely used for consumption but nations like Brazil and India also dope it in petrol. “The Government of India, with the aim to enhance India’s energy security, reduce import dependency on fuel, save foreign exchange, address environmental issues and give a boost to the domestic agriculture sector, has been promoting the Ethanol Blended Petrol (EBP) Programme,” the statement said. It has advanced the nation’s target of making petrol with 20 per cent ethanol by five years to 2025 in a move that’s expected to save USD 4 billion annually. This increased blending will expand the use of renewable energy in the world’s third-biggest oil importer and help turn the nation’s surplus rice and damaged foodgrains into ethanol. “The ‘National Policy on Biofuels’ notified by the Government in 2018 envisaged an indicative target of 20 per cent ethanol blending in petrol by year 2030. However, considering the encouraging performance, due to various interventions made by the Government since 2014, the target of 20 per cent ethanol blending was (last year) advanced from 2030 to 2025-26,” the statement said. Oil ministry officials said 20 per cent ethanol blended petrol will be available at select petrol pumps in the country by April 2023 and it will be progressively spread to other parts. Since the past two decades, India has been making progress towards putting in place an ecosystem to increase the quantities of fuel-grade ethanol blended into petrol under the EBP for use in vehicles, particularly two- and four-wheelers. This effort has been ramped up in recent years as multiple benefits of the EBP have become more apparent in light of volatile international energy markets and increased focus on decarbonisation of transport fuels. While earlier fuel-grade ethanol was produced only from sugarcane, since 2018 alternate routes such as sugarcane juice, sugar and sugar syrup, B heavy Molasses, C Heavy Molasses, damaged foodgrains unfit for human consumption, surplus rice and maize, were opened up. OMCs set up some ethanol production units and offered long-term procurement contracts to ethanol suppliers to give them assurity of business. OMCs started blending ethanol in petrol on a pilot basis in 2006. The blend then was up to 5 per cent in sugar surplus states. Availability of ethanol was a constraint and steps taken thereafter have improved supplies. During the current ethanol supply year (December 2021 to November 2022), the availability to OMCs is likely to touch 4.50 billion litres (as compared to 670 million litres in 2014). For 20 per cent blend, 10 billion litres of ethanol will be required. As the availability of ethanol increases, the equivalent amount of crude (used for petrol production) import is reduced. Prime Minister Narendra Modi announced the achievement of the 10 per cent target at an event to mark the World Environment Day in the national capital on Sunday. “Elaborating on the enormity of the achievement, the Prime Minister said that in 2014 ethanol blending was at 1.5 per cent,” a separate official statement said. “There are three clear benefits of achieving this goal, he explained. First, it has led to a reduction of 0.27 million tonnes of carbon emission. Second, it has saved foreign exchange worth Rs 410 billion and thirdly, farmers of the country have earned Rs 406 billion in the last 8 years due to increase in ethanol blending,” it added. The Centre had also announced an additional duty of Rs 2 per litre on unblended fuels starting October 2022 to incentivise blending. That duty will no longer be effective as the target of 10 per cent blend has been achieved. “In order to meet the gap between current availability and the future requirements of ethanol for the EBP program, public sector OMCs have now signed long term off-take agreements with 131 upcoming dedicated ethanol plants in ethanol deficit states which will augment the ethanol production capacity by approx 7.50 billion litres per annum. “This is expected to improve the ethanol availability and help in achieving the blending targets set for the country,” BPCL said in a statement. To meet the blending targets, OMCs are making huge investments in augmenting the blending infrastructure at their terminals and depots. “In order to achieve uniform blending across the country, the OMCs are now transporting ethanol as well as ethanol blended petrol over long distances with the help of Railway Tank Wagons,” it added.
U.S. Economic Officials Says Biden Considering Oil & Tax Windfall Tax
A White House economic advisor told a panel on Thursday that the Biden administration is now considering the U.S. congressional proposal that would place a windfall tax on oil and gas as prices at the pumps continue to soar, “We are very much open to any proposal that would provide relief to consumers at the pump,” National Economic Council deputy director Bharat Ramamurti told a Roosevelt Institute panel, as cited by Reuters. Ramamurti said the White House was “engaging in conversations” with Congress about a windfall tax, noting there was a “variety of interesting proposals”. The National Economic Council official also noted a potential impact on supply if a windfall tax were imposed, though he said he did not see this as an “insurmountable hurdle”, Reuters reported. Ramamurti’s comments came just a day after the National Economic Council deputy director told reporters that Biden’s plan to combat inflation included lowering the budget in part by raising taxes on America’s wealthiest and the country’s big businesses. “What the president has done and made clear is that we are dedicated to doing everything we can to stop and push back on that Russian aggression, but it’s going to cause pain for American consumers in the short term, and gas prices are one unfortunate example,” Ramamurti told local media. On Thursday, the national average for a gallon of gasoline in the United States hit $4.715, up from $4.671 on Wednesday, according to AAA. Brent crude was trading at nearly $118 and WTI at $117. Talk of a potential windfall tax in the United States follows a move by Hungary to impose taxes on extra profits for large companies across industries, in order to subsidize consumer energy bills and defense. It also follows an announcement on May 26 that the UK would implement a windfall tax on energy first in the North Sea.
ADNOC acquires three additional new-build LNG vessels
ADNOC Logistics and Services, also known as ADNOC L&S, has decided to purchase three additional newly built liquefied natural gas vessels, as it plans to respond to the growing demand, according to news agency WAM. Each of these vessels will have a capacity of 175,000 cubic meters, and they will have additional capacity when compared to the firm’s current fleet which have a capacity of 137,000 cubic meters. Earlier, in April, the Abu Dhabi-based business had announced that it will purchase two LNG vessels, which brings the total number of LNG vessels ordered to five. These vessels are scheduled for delivery in 2025 and 2026. “Our company is an active player in the evolving global energy landscape, where natural gas and LNG are playing an increasingly important role. Our strategic acquisition of five state-of-the-art LNG vessels will support our existing LNG business as well as its significant growth plans,” said Abdulkareem Al-Masabi, CEO of ADNOC L&S.