Fuel prices up: Piped gas for cooking now Rs 39.5, CNG Rs 66
The price of compressed natural gas (CNG) has seen an unprecedented hike of over Rs 18 in less than a year in Mumbai, with a fresh hike of Rs 2.50 per kg from Sunday morning. The rate of piped gas has also gone up by Rs 1.50 a unit. The hikes have raised fears of a possible auto-taxi fare hike in the region this year, and an increase in school bus fees besides hiked fares for transportation in private buses running on CNG. The CNG hike will be a huge burden for over 8 lakh consumers, including over 3 lakhcar users who opted for the green fuel as it was cheaper than petrol and diesel besides being environment-friendly. This is the fifth hike since October and it has gone up by Rs 14 since October. The revised prices of CNG — inclusive of all taxes — in Mumbai metropolitan region from Sunday morning will be Rs 66 per kg while rate of piped gas will rise to Rs 39.50 per unit. Mumbai Taximen’s Union and Mumbai Rickshawmen’s Union have already petitioned the state transport department for hikes of Rs 5 and Rs 2 for taxi and autos respectively. “The fuel cost taken into account while calculating the fare hike announced in 2021 was less than Rs 50 per kg of CNG. Now this has gone up to Rs 66 which is too high,” said Thampy Kurien of the rickshaw union. However, one of the unions demanded that the price be rolled back so that there is no fare hike burden on consumers. Mumbai Autorickshawmen’s Union leader Shashank Rao said that the government should avoid a fare hike and roll back CNG hikes. “Citizens will not tolerate another fare hike and it will not be proper to demand for one. So we are writing to chief minister Uddhav Thackeray and transport minister Anil Parab to intervene,” he said. Drivers of cabs like Ola or Uber are also seeking a hike in fares as many have switched to CNG from diesel. A spokesperson from Mahanagar Gas Limited (MGL) said: “In order to meet the shortfall in domestic gas allocation, MGL is sourcing additional natural gas to cater to the rising demand by consumers. On account of substantial increase in the market price of natural gas, we have to increase prices of CNG and piped gas.” She further said that even after the price revision, CNG offers attractive savings of about 59% and 30% as compared to petrol and diesel respectively at current prices in Mumbai. The comparative price of petrol is Rs 109.98 a litre and diesel is retailing at Rs 94.14 per litre. “Also, domestic piped gas offers 22% saving compared to current price of domestic LPG cylinder that costs nearly Rs 900 a cylinder in Mumbai. Piped gas is safe, reliable and environment friendly,” she added.
Uzbekistan temporarily suspends gas exports to cover domestic needs
Uzbekistan has halted exports of natural gas in order to meet domestic energy needs, the Interfax agency reported on Thursday. The announcement comes as protests rage in neighboring Kazakhstan, spurred initially by gas price hikes. “For now, exports of gas have been completely halted and all the volumes are being directed towards domestic use, particularly to meet the population’s needs,” Uzbekistan’s energy ministry was quoted as saying. The ministry also said there were no exports of gas to Russia and no export plans for 2022.
“India on track to surpass China as third-largest ethanol consumer by 2026”: IEA
The ethanol demand in India has tripled between 2017 and 2021 with consumption expected at 30 million litres in the last calendar year. As a result, India will surpass China to become the world’s third-largest ethanol consumer by 2026. “India is on track to surpass China as the world’s third-largest ethanol consumer by 2026. In January 2021, India brought forward its 20 per cent ethanol blending target with gasoline from 2030 to 2025 and is aiming to start selling 20 per cent blends in 2023,” as per the International Energy Agency (IEA). In October last year road Transport and Highways Minister Nitin Gadkari, addressing a webinar on alternative fuels organised by industry body ISMA, said the government is promoting ethanol manufacturing in a big way and assured that it will procure all ethanol produced in the country. In an effort to reduce the import of petroleum products, the government has been encouraging farmers to produce ethanol that can be blended with petrol and used as a fuel in vehicles. India has made impressive progress in increasing ethanol blending, from 2 per cent in 2017 to 8 percent by the summer of 2021. “In our accelerated case, we assume India meets these challenges and achieves its 20 per cent blending target in 2025,” IEA projected. The government has hiked the price of ethanol extracted from sugarcane for blending in petrol by up to Rs 1.47 per litre for 2021-22 marketing year starting December, as part of its target to achieve 20 per cent doping by 2025. Higher mixing of ethanol in petrol will help cut India its oil import bill and also benefit sugar cane farmers as well as sugar mills.
GAIL, BPCL, HPCL bids for city gas licences raise eyebrows
GAIL, BPCL and HPCL are competing for licences in 19 city gas distribution areas – nearly a third of 61 being contested in the latest bidding round – with the companies they control, drawing allegations of unfair practice. For instance, the licence area comprising Baloda Bazar, Gariyaband and Raipur districts in Chhattisgarh has received 16 bids, of which six are from companies — GAIL NSE 1.84 % Gas, BPCL, HPCL, Indraprastha Gas (IGL), Mahanagar Gas (MGL) and Aavantika Gas – sharing a complex web of relationship. Gail Gas is a fully owned subsidiary of GAIL (India). GAIL (India) is also the promoter of MGL. Gail (India) and BPCL jointly control IGL, while Gail (India) and HPCL jointly control Aavantika Gas. Similarly, of the 15 bids received for Nagpur, four are from Gail Gas, MGL, Maharashtra Natural Gas (MNGL) and BPCL. MNGL is a GAIL-BPCL joint venture. BPCL is competing for licences with its related entities in 15 areas while Gail Gas is in a contest in 11 and HPCL in three. IGL and Central UP Gas, the two BPCL-GAIL JVs, are competing for two city gas areas in UP. BPCL, GAIL, HPCL and Petroleum & Natural Gas Regulatory Board didn’t respond to ET’s request for comment. However, a source close to PNGRB said all these firms were ultimately owned by the government and run by independent boards, leaving no scope for any unfair practice. An executive at a large city gas firm, however, rejected PNGRB’s defence, saying the auction process has been vitiated, as the group with more than one bid for a licence has a bigger chance to win. “It’s unfair to other bidders – public or private,” he said. Private players like Adani, Think Gas and Torrent Gas are some of the big bidders in the current round. An addendum to the tender issued by PNGRB on November 18 says: “In case an entity forms more than one JV/consortium, for example, X forms JV/consortium with Y (consortium C-1), and X forms another JV/consortium with Z (consortium C-2), then consortium C-1 & C-2 are not allowed to bid for the same GA”. The source close to PNGRB said the addendum doesn’t apply to established JVs but must be seen in the context of new consortiums formed to comply with the net worth criteria and to avoid any manipulation.
Britain’s Cairn Energy withdraws all lawsuits against India, now entitled to Rs 79 billion tax refund
Britain’s Cairn Energy has dropped all lawsuits against the Indian government and its entities in courts from the US to France and to Singapore, to now be entitled for about Rs 79 billion refund of taxes that were collected to enforce a retrospective tax demand. As part of the settlement reached with the government in the seven-year-old dispute over the levy of back taxes, the company – which is now known as Capricorn Energy PLC – has withdrawn all cases that were brought to collect the tax refund ordered by an international arbitration tribunal after rescinding retrospective raising of demand, according to an advertisement it issued in Indian newspapers on Wednesday. The government had initially refused to honour the December 2020 arbitration award but in August 2021 brought a law to scrap all retrospective tax demands and refund money collected, after it faced prospects of assets, ranging from flats used by its diplomatic staff in Paris and Air India planes in the US being seized to recover the refund due. In the advertisement, a requirement under the August 2021 law – the company said: “It has entered into the final stage in its undertaking with the Government of India by withdrawing Indian and global appellate and enforcement proceedings. This action is the final necessary step by the company under the rules of India’s Taxation (Amendment Act), 2021,”. The company on November 26, 2021, initiated proceedings to withdraw lawsuits it had filed in several jurisdictions to enforce an international arbitration award which had overturned the levy of Rs 102.47 billion retrospective taxes and ordered India to refund the money already collected. First, the lawsuit brought in Mauritius for recognition of the arbitration award was withdrawn, followed by similar measures in courts in Singapore, the UK, and Canada. On December 15, it sought and got ‘voluntary dismissal’ of a lawsuit it had brought in a New York court to seize assets of Air India to recover the money due from the government. On the same day, it made a similar move in a Washington court where it was seeking recognition of the arbitration award. Recognition of arbitration award is the first step before any enforcement proceedings like the seizure of assets. The critical lawsuit in a French court, which had attached Indian properties on the petition of Cairn, was withdrawn thereafter followed by the one in Netherlands. “The company will now file its Form 3 with the Income Tax Department, which will allow the Government to proceed to the final stage of issuing Form 4 of its undertakings,” the advertisement said. Form 3 is an application that details the cases withdrawn. Issue of Form 4 would lead to the refund of the taxes. While Form 3 is likely to be filed this week, the company would in all likelihood get the refund within this month. “This will result in the Taxation Amendment Act nullifying the tax assessment originally levied against the company in January 2016 and the Government of India ordering the refund of the taxes collected from the company in respect of that assessment,” the advertisement said. It further stated that it is issuing a notice to confirm that the company shall forever irrevocably forgo the right to use any arbitration or court order against the Indian government or its entities and no claim subsists. “The company has provided an undertaking which includes a complete release of the Republic of India and any Indian affiliates with respect to any award, judgment, or court order” and has provided an “indemnity against any claims,” it added. The attachment of Indian assets, including some flats in Paris, in July 2021 had triggered scrapping of the 2012 amendment to the Income Tax Act. This gave taxmen powers to go back 50 years and slap capital gains levies wherever ownership had changed hands overseas but business assets were still in India. The tax department had used the 2012 legislation to levy Rs 102.47 billion in taxes on alleged capital gains Cairn made on reorganisation of business in India prior to its listing in 2006-07. Cairn contested such demand saying all taxes due (when the reorganisation, which was approved by all statutory authorities took place) were duly paid. But the tax department in 2014 attached and subsequently sold the residual shares that Cairn held in the Indian unit, which was in 2011 acquired by Vedanta group. It also withheld tax refunds and confiscated dividends due to it to settle part of the tax demand. All this totalled Rs 79 billion. Seeking to repair India’s damaged reputation as an investment destination, the government in August 2021 enacted new legislation to drop Rs 1100 billion in outstanding claims against multinationals such as telecom group Vodafone, pharmaceuticals company Sanofi and brewer SABMiller, now owned by AB InBev, and Cairn. About Rs 81 billion collected from companies under the scrapped tax provision are to be refunded if the firms agreed to drop outstanding litigation, including claims for interest and penalties. Of this, Rs 79 billion is due only to Cairn. Subsequent to this, the government in November 2021 notified rules that when adhered to will lead to the government withdrawing tax demands raised using the 2012 retrospective tax law and any tax collected in the enforcement of such demand is paid back. For this, companies are required to indemnify the Indian government against future claims and withdraw any pending legal proceedings. An international arbitration tribunal in December overturned the levy of Rs 102.47 billion in taxes on a 2006 reorganisation of Cairn’s India prior to its listing, and asked the Indian government to return the value of shares seized and sold, dividend confiscated and tax refund withheld. This totalled USD 1.2 billion-plus interest and penalty. The government initially refused to honour the award, forcing Cairn to identify USD 70 billion of Indian assets from the US to Singapore to enforce the ruling, including taking flag carrier Air India Ltd to a US court in May.
“India on track to surpass China as third-largest ethanol consumer by 2026”: IEA
The ethanol demand in India has tripled between 2017 and 2021 with consumption expected at 30 million litres in the last calendar year. As a result, India will surpass China to become the world’s third-largest ethanol consumer by 2026. “India is on track to surpass China as the world’s third-largest ethanol consumer by 2026. In January 2021, India brought forward its 20 per cent ethanol blending target with gasoline from 2030 to 2025 and is aiming to start selling 20 per cent blends in 2023,” as per the International Energy Agency (IEA). In October last year road Transport and Highways Minister Nitin Gadkari, addressing a webinar on alternative fuels organised by industry body ISMA, said the government is promoting ethanol manufacturing in a big way and assured that it will procure all ethanol produced in the country. In an effort to reduce the import of petroleum products, the government has been encouraging farmers to produce ethanol that can be blended with petrol and used as a fuel in vehicles. India has made impressive progress in increasing ethanol blending, from 2 per cent in 2017 to 8 percent by the summer of 2021. “In our accelerated case, we assume India meets these challenges and achieves its 20 per cent blending target in 2025,” IEA projected. The government has hiked the price of ethanol extracted from sugarcane for blending in petrol by up to Rs 1.47 per litre for 2021-22 marketing year starting December, as part of its target to achieve 20 per cent doping by 2025. Higher mixing of ethanol in petrol will help cut India its oil import bill and also benefit sugar cane farmers as well as sugar mills.
GAIL completes acquisition of IL&FS’s 26 per cent stake in OTPC
State-owned gas utility GAIL (India) Ltd on Tuesday said it has completed the acquisition of bankrupt Infrastructure Leasing and Financial Services’ (IL&FS) 26 per cent stake in ONGC Tripura Power Company (OTPC). OTPC is a special purpose vehicle set up by Oil and Natural Gas Corporation (ONGC) to build a 726.6 megawatt combined cycle gas turbine (CCGT) thermal power plant at Palatana, Tripura. The IL&FS group and the Government of Tripura (GoT) were partners in the special purpose vehicle (SPV). ONGC holds 50 per cent interest in the company in the project that supplies electricity to the northeastern states. Tripura government holds 0.5 per cent while India Infrastructure Fund II holds the balance 23.5 per cent stake. ”GAIL and IL&FS Group successfully concluded the transaction wherein GAIL acquired an equity stake of 26 per cent held by IL&FS Energy Development Company Ltd (IEDCL) and IL&FS Financial Services Ltd (IFIN) in ONGC Tripura Power Company Limited (OTPC), which owns and operates a 726.6 MW gas-based combined cycle power plant in Palatana, Tripura,” the state-owned firm said in a stock exchange filing. GAIL had in November 2021 got the National Company Law Tribunal (NCLT) approval for the acquisition. The Tripura power project was set up to use locally produced natural gas which was otherwise economically unviable to transport gas. The 726.6 MW project is an integral part of the government’s efforts to develop infrastructure in the northeastern region and has been touted as the single-largest investment in northeast India. The gas to the Tripura project is supplied by ONGC’s 55 km pipeline. As part of its green energy playbook, GAIL is focussing on building a clean energy portfolio and the acquisition is part of that plan.
Czechs want tweaks to nuclear and gas conditions in EU green plan
The Czech Republic will seek allies to change conditions for the inclusion of gas and nuclear power projects in the European Union’s hotly-debated green investment plan. In a proposal on Dec. 31, the EU Commission included gas and nuclear investments in new guidelines to finance energy projects and facilitate an eventual transition to fully renewable output. Some EU nations say gas investments are needed to help them quit more-polluting coal while others say labelling a fossil fuel green undermines the EU’s efforts to be a global leader in tackling climate change. The Czech Republic, along with France and Poland, say nuclear power has a big role to play given its lack of CO2 emissions, but others including Austria, Germany and Luxembourg are worried over radioactive waste. Czech government and industry officials initially welcomed gas and nuclear’s inclusion in the draft rules, but criticism appeared after some looked closer at the details. “Our main task now is to reach out to like-minded EU member states and try … to negotiate better conditions that will more reflect our interests,” Czech Industry Minister Jozef Sikela tweeted late on Monday, without elaborating on those conditions. Daniel Benes, chief executive of majority state-owned utility CEZ and a vice-president in the Czech Industry Confederation, called the plans too strict. A proposed requirement for having 30% of hydrogen mixed in gas fuel for power plants by 2026 was unrealistic, he said. Benes also said, in a post on LinkedIn, that the rules would mean the Czech Republic would be limited to building just one new nuclear power unit, planned at CEZ’s Dukovany plant, but no further ones as it wants. The Commission will collect comments until Jan. 12 and hopes to adopt a final text by the end of the month. After that, the text can be discussed with EU governments and parliament for up to six months.
Adani Total Gas launches Greenmosphere initiative
Adani Total Gas and a joint venture between the Adani Group and Total Energies, has launched a new green initiative that targets afforestation, outreach to millennials, and energy audits. Titled Greenmosphere, this ATGL initiative will drive mass tree plantation programmes, spread awareness about climate change among the young, and encourage sustainable energy practices through energy audits. The afforestation programme, which envisages large-scale community participation, aims to increase the fresh sources of oxygen. This, in turn, will reduce the copious amount of greenhouse gases. ATGL sees Greenmosphere as a corporate movement that will help in achieving the Sustainable Development Goals (SDGs) by halting deforestation, boosting afforestation, and supporting wetland conservation.
Delhi collected Rs 1,298 cr in green fund; spent only one-fifth in 6 years
The Delhi government has spent only 21 per cent of the Rs 1,298 crore collected as environment compensation charge from diesel-guzzling trucks entering the capital in the last six years, according to official data. Implemented on the directions of the Supreme Court, the South Delhi Municipal Corporation (SDMC) collects the cess and deposits it with the Transport Department. Since November 20, 2015, the city government has utilized only Rs 281.5 crore of the Rs 1,298 crore collected as “environment cess” on green projects, as per a reply to an RTI application filed by social activist Amit Gupta. The maximum fund (Rs 271 crore) was utilised in the financial year 2018-19, with the city government sanctioning Rs 265 crore to the National Capital Region Transport Corporation (NCRTC) for the Delhi-Meerut Regional Rapid Transit System (RRTS) project. The NCRTC is a joint venture of the Centre and governments of Delhi, Haryana, Rajasthan and Uttar Pradesh for implementing the RRTS project across the National Capital Region. According to the RTI reply, the government released Rs 93 lakh to the SDMC in 2016-17 as “pre-tendering incidental cost of RFID” project which involved installation of automatic radio frequency identification devices at Delhi’s border points for collection of toll and environment cess. It also sanctioned Rs 15 crore from the amount for a pilot project which involved using Hydrogen-enriched CNG in 50 state-run buses in 2018-19 and 2019-20 to reduce pollution and improve fuel economy. The project has since been put on the backburner. Last month, PTI had reported that the government spent Rs 527 crore on green activities from Rs 547 crore collected in the Air Ambience Fund since 2008. Set up in 2008 and collected through the Department of Trade and Taxes, the Air Ambience Fund gets 25 paise from the sale of each litre of diesel in Delhi. The fund has been utilized for grant of subsidy to battery-operated vehicles, e-rickshaws, odd-even drive, maintenance of the bio-gas plant at the Delhi Secretariat, operating online air monitoring stations, study on real-time source apportionment, installation of smog tower and salary of environment marshals, according to the government.