MGL again hikes prices of CNG, domestic PNG
For the second time in six months, the Mahanagar Gas Ltd on Tuesday announced hike in prices of Compressed Natural Gas and Domestic Piped Natural Gas for Mumbai and surrounding areas, with effect from midnight July 13-14, officials said. The rate of CNG – used in over 800,000 vehicles – has been hiked by Rs 2.58/kg, taking it up to Rs 51.98/kg, raising fresh fears of a corresponding increase in the fares for public transport vehicles. The price of Domestic PNG has been increased by Rs.0.55/Standard Cubic Metre and the new rates will be Rs 30.40/SCM in Slab 1 and Rs 36/SCM in Slab 2, for the 800,000-plus customers in the Mumbai Metropolitan Region region. After the last hike on February 8, the MGL’s new rates came as people in Mumbai reel under steep petrol prices of over Rs 105/litre and diesel prices hovering around Rs 100/litre. However, the MGL said that despite the fresh revision in prices of CNG – to offset operational costs and increase in gas pipeline transportation costs, it is around 67 per cent and 47 per cent cheaper than petrol and diesel, respectively. Likewise, the price of Domestic PNG is around 35 percent cheaper than the Domestic Liquified Petroleum Gas, besides additional benefits of convenience, reliability, safety and eco-friendliness, said the spokesperson.
Britain to ban all new diesel and petrol heavy goods vehicles from 2040
Britain will ban the sale of new petrol and diesel heavy good vehicles from 2040 as part of a broader package of green initiatives aimed at achieving net zero emissions from all forms of transport ten years later. Prime Minister Boris Johnson’s government is seeking to elevate Britain’s environmental credentials as he prepares to hold the United Nations’ Climate Change Conference, known as COP26, in Scotland later this year. The government said that it would ban the sale of smaller diesel trucks from 2035, and larger ones weighing more than 26 tonnes from 2040, or earlier if feasible. It also set out plans to create a net zero rail network by 2050 and ensure net zero domestic aviation emissions by 2040. “Decarbonisation is not just some technocratic process. It’s about how we make sure that transport shapes quality of life and the economy in ways that are good,” said Transport Secretary Grant Shapps. “It’s not about stopping people doing things: it’s about doing the same things differently.” As world powers try to slash carbon emissions by scrapping the fossil-fuel guzzling internal combustion engine, Britain has already pledged to ban the sale of new diesel and petrol cars from 2030. On aviation, the government said it was launching a consultation to achieve a net zero emissions target by 2050, with “an action plan for how it can be achieved – ensuring everyone can continue to fly for holidays, visits to family and business without contributing to climate change.”
Directorate General of Hydrocarbons overhauls oilfield approval processes, cuts down paperwork
In a major overhaul, DGH has made it easier for firms to explore and produce oil and gas in the country by limiting the requirement of statutory approvals to only extension of contracts, sale of stake and annual accounts while allowing self-certification and deemed approval for the rest. The Directorate General of Hydrocarbons (DGH), the government’s technical arm overseeing upstream oil and gas production, said procedures and processes for oil and gas blocks awarded under nine bids round of New Exploration Licensing Policy (NELP) and pre-NELP blocks are being simplified and standardised. While state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) produce two-third of India’s oil and gas from blocks or areas given to them on a nomination basis, the remaining output is from pre-NELP and NELP blocks. The pre-NELP blocks include Panna/Mukta and Taoil and gas fields in western offshore and Ravva field in the KG basin. But the biggest of oil and gas discoveries outside of the nomination acreage have happened in the blocks awarded under NELP since 2000. These include Reliance Industries Ltd’s eastern offshore KG-D6 block and NEC-25. ONGC too has significant finds in NELP blocks. “Ease of doing business is one of the key focus areas of the government in Exploration and Production (E&P) sector with the objective to increase investment and production. Simplification and standardisation of procedures and processes make the system transparent and efficient,” DGH said an order dated July 12. DGH undertook a review of processes of various approvals and submission of documents under Production Sharing Contracts (PSC) for NELP and pre-NELP blocks. As many as 37 processes and procedures were required to be followed by a firm exploring oil and gas in a block awarded under NELP or pre-NELP rounds. These have now been cut to just 18. Self-certification has been allowed in half of them, including for declaring a discovery as commercially viable as well as on requirement of submission of quarterly reports, insurance and indemnity and bank guarantees. No approval will be needed for any of these processes, DGH said. DGH has allowed deemed approval on expiry of 30 days of submission of self-certified documents on the annual work programme, appraisal and field development plan or its revision. Prior approval of the block oversight committee, DGH or the Oil Ministry will be required only in cases where extension of the contract or exploration phase is to be granted or the contractor is selling or exiting the block. End-of-year accounting statement, abandonment plan and cost of unfinished work programme too would need prior approval. “Thus the 37 erstwhile processes of contract compliance are now covered by 18 processes of contract compliance by merging or subsuming in other processes,” DGH said. Further, submission of all documents will be made online as per the given templates, it added. India in 2016 migrated to an open acreage licensing regime where companies can choose the area they want to explore rather than the government demarcating it. The new regime provides much easier compliance but the legacy contracts had continued to have a large compliance burden. The compliance requirement of NELP had also led to controversies such as allegations of gold-plating of the cost and over-estimation of reserves in KG-D6. Now the processes have been streamlined. “In order to enhance the ease of doing business, the processes have been further rationalised and limited to processes where documents shall be accepted on self-certification basis and no approval is required – 9; processes where approval will be deemed on expiry of 30 days of submission of self-certification of documents – 3; processes where approvals shall be required under rules or contracts – 6,” DGH said.
Merkel doubts Biden meeting will solve gas pipeline dispute
German Chancellor Angela Merkel said Monday that she doubts the dispute between her country and the United States over a nearly completed gas pipeline from Russia will be fully resolved at a meeting with President Joe Biden this week. Washington has long argued that the Nord Stream 2 pipeline carrying natural gas from Russia to Germany endangers Europe’s energy security and harms allies such as Ukraine, which currently profits from transit fees for Russian gas. The United States recently waived sanctions against German companies involved in the project, raising hopes in Berlin that an agreement acceptable to all sides can be found. Merkel said she will discuss the issue with Biden at a White House meeting Thursday, but added: “I don’t know whether the papers will be fully finalized, so to speak. I believe rather not.” “But these will be important talks for developing a common position,” she added. Germany is keen to increase its use of natural gas as it completes the shutdown of its nuclear power plants next year and phases out the use of heavily polluting coal by 2038. Merkel’s comments to reporters in Berlin came ahead of a meeting with Ukrainian President Volodymyr Zelenskyy, who has warned that Nord Stream 2 poses a threat to his country’s energy security. Should Russia route all of its gas around Ukraine in future, the country might be cut off from the supplies it needs, putting it at further risk of being pressured by Moscow. Russia annexed Crimea from Ukraine in 2014 and supports separatists in Ukraine’s eastern industrial heartland of Donbas. Zelenskyy said he was looking for guarantees that Ukraine will remain a transit country for Russian gas beyond 2024. Merkel said she took Ukraine’s concerns seriously and said Germany and the European Union would use their weight in negotiations with Russia to ensure the agreements are extended. “We have promised this to Ukraine and we will stick to that. I keep my promises and I believe that is true also for any future German chancellor,” she said. Merkel isn’t running for a fifth term in Germany’s national election on Sept. 26. Merkel also announced that Germany will give Ukraine 1.5 million doses of coronavirus vaccine, with more possibly shots to come.
Centre sitting on Rs 25 lakh cr fuel tax; inflation, petroleum price rise will dominate session: Kharge
Stating that the issue of inflation and the rise in fuel prices will dominate the Parliament session beginning July 19, senior Congress leader Mallikarjun Kharge on Monday alleged the Centre had collected Rs 25 lakh crore through fuel tax but it is neither using this fund for the welfare of people nor giving it to state governments. Addressing a press conference here, the Leader of Opposition in the Rajya Sabha said the Narendra Modi government had made the lives of ordinary people “miserable” in the last seven years. ”Prices of fuel, LPG, edible oil are at an all-time high. The Centre has collected Rs 25 lakh crore as tax on fuel but it is not being used for people’s welfare or being given to state governments,” Kharge alleged. He said the Modi government had raised prices of fuel “326 times including 38 times in the last two months”. “The Central tax on fuel during the UPA rule was Rs 9.48 (per litre) which is now Rs 32.90 (per litre). During the tenure of the UPA, the rate of crude oil was Rs 111 per barrel and the petrol price was Rs 71 (per litre). Contrary to this, when the rate of crude oil is 44 USD per barrel the price of petrol is Rs 107 per litre now,” he said. He said while the Union government has “collected Rs 25 lakh crore in the fuel tax” and the rate of LPG cylinder has reached Rs 834 the subsidy has also been withdrawn. “The prime minister had said direct benefit transfer (DBT) would ensure savings of Rs 15,000 crore, which means the government has saved almost Rs one lakh crore this way. But the Modi government is not using this money for the welfare of people and also not providing it to state governments,” Kharge said. He said Congress leader Rahul Gandhi had suggested that Rs 6,000 be transferred in bank accounts of the poor, but that idea was rubbished. “During the UPA rule, 27.1 per cent people were lifted above the below poverty line whereas 23 crore people were below the poverty line (BPL) as of last year. Due to the wrong policies of the Modi government, the income of 97 per cent of families had reduced,” Kharge said. He said 1.33 lakh people lost their jobs during the COVID-19 pandemic while the per capita income fell by Rs 10,000 and GDP dipped by 9 to10 per cent. Kharge said Maharashtra is yet to receive Rs 32,000 crore in GST refund from the Centre. The Congress is one of the ruling constituents in the Maha Vikas Aghadi government comprising the Shiv Sena and the NCP.
Oil prices slip as economic fears offset tightening crude supplies
Oil prices fell on Monday as concerns about slowing global growth outweighed the prospect of tightening supply after talks among key crude producers to raise output in the coming months stalled. Brent crude for September fell 45 cents, or 0.6 per cent, to $75.10 a barrel by 12:08 p.m. EDT (1605 GMT). U.S. West Texas Intermediate crude for August was at $74.07 a barrel, down 49 cents, or 0.7 per cent. Both benchmarks fell about 1 per cent last week but remain close to highs not seen since October 2018. The spread of coronavirus variants and unequal access to vaccines threaten the global economic recovery, finance chiefs of the G20 large economies said over the weekend. The remarks weighed on the oil demand outlook. “Traders are now refocusing on the spread of the COVID-19 pandemic and global concerns over the new variants’ expansion,” Rystad Energy analyst Louise Dickson said. The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, abandoned talks last week over an output deal, which included pumping more oil from August, after a dispute between Saudi Arabia and the United Arab Emirates about how to extend the pact. Although the failure to agree means less oil in the short term, analysts say the collapse of talks raises the longer term prospect of producers abandoning the deal and pumping at will. “The longer the standoff … the greater the possibility of some sustained price weakness,” said Jim Ritterbusch of Ritterbusch and Associates in Houston. “For now, we still anticipate some movement this week with an OPEC + plan to disregard 2022 production quotas while focusing on the coming six months in which the UAE demands for less production restraint may be accommodated.” Saudi Arabia and Oman called for continued cooperation between OPEC and allied producers. Meanwhile, oil stockpiles in the biggest crude producing nation continued to tighten, with U.S. inventories falling to the lowest since February 2020 in the week to July 2. Analysts polled by Reuters estimate U.S. crude in storage fell by about 4.3 million barrels in the week to July 9.
Centre seeks legal opinion to let BPCL sell subsidised LPG after stake sale
A two-decade-old LPG supply order restricting supply of domestically produced LPG to only state-owned oil companies has stymied plans to allow Bharat Petroleum Corporation Ltd (BPCL) to continue selling subsidised cooking gas (LPG) after its privatisation. A legal opinion has now been sought to ascertain if privatised BPCL will be eligible to receive liquefied petroleum gas (LPG) produced by companies such as ONGC and GAIL, two government officials with knowledge of the development said. Currently, BPCL has more than 84 million domestic LPG customers, including 21 million Ujjwala customers. The company does not produce enough LPG at its refineries to be able to cater to the requirement of all these. It, like other oil marketing companies, buys LPG from state-owned firms like Oil and Natural Gas Corporation (ONGC) and GAIL (India) Ltd as well as private companies such as Reliance Industries Ltd. The Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order, 2020, known as LPG Control Order of 2000, restricts sale of indigenously produced cooking gas only to state-owned oil marketing companies — Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and BPCL. It restricts supply of LPG produced by firms such as ONGC and GAIL to private firms. Private LPG retailers, called parallel marketeers, have to use imported gas for supplying to customers. The 2000 Control Order was issued as the nation is short in LPG production. Once BPCL is privatised, the 2000 order will bar ONGC and GAIL from selling LPG to BPCL, the officials said. “Post divestment of the government’s stake in BPCL, it shall cease to be a government oil company in terms of clause 2(g) of LPG Control Order of 2000,” an official said. With no access to indigenously produced LPG, BPCL won’t be able to serve its customers and it would not be possible to shift the customers to IOC and HPCL as LPG cylinder equipment at customer end will need to be changed. Also, IOC and HPCL may not have the required infrastructure to cater to such a large customer base, the officials said. As a way out, it is being considered to continue to treat BPCL as a government company for the purpose of the 2000 Control Order for three years, the officials said adding that a legal opinion has been sought to ascertain if such a move is tenable under the law. The other alternative is to amend the LPG Control Order itself to allow private firms to access indigenously produced LPG. This would open up LPG retailing to other private firms. Officials said law ministry opinion has been sought to determine if the term government oil company in the LPG Control Order necessary requires the company to be a government company and if BPCL post privatisation can be notified as a government oil company. To interpret the term ‘government company’, the opinion of the Ministry of Corporate Affairs (MCA) as well as the Ministry of Consumer Affairs (MoCA) has been sought, they said. MCA because it is the administrative ministry for purposes of administration of the Companies Act, 2013 and MoCA because it is the administrative ministry/department for the purposes of administration of Essential Commodities Act, 1955, under which the LPG Control Order of 2000 was issued. Officials said the new owner of BPCL will after three years of takeover get a right to decide on retaining the business of selling subsidised LPG. The firm’s cooking gas LPG customers will be transferred to IOC and HPCL in case the new owner does not want to continue with such a business, the officials added. The government gives 12 cooking gas (LPG) cylinders of 14.2-kg each to households in a year at a subsidised rate. There is no subsidy being paid in most parts of the country but a subsidy will be directly paid into the bank accounts of the users in case prices rise steeply. The government is selling its entire 53 per cent stake along with management control in BPCL. The new owner will get 15.33 per cent of India’s oil refining capacity and 22 per cent of the fuel marketing share. It also owns 18,652 petrol pumps, 6,166 LPG distributor agencies and 61 out of 260 aviation fuel stations in the country.
Why govt is not cutting petrol, diesel prices; Rs 1300 billion oil bond repayments due for cheap fuel in past
While Prime Minister Narendra Modi’s government faces growing clamour to rein in rising petrol and diesel prices by cutting taxes, the reason for it not yielding to the demand can be traced back to the early 2000’s. The present and the next governments have a bill worth Rs 1300 billion to pay, thanks to the then governments’ largesse of keeping petrol and diesel prices in check. Of late, retail fuel prices hit over Rs 100 per litre in many states, including national capital Delhi. Notably, various central and state taxes make up for up to 60 per cent of fuel prices. The central government mopped up Rs 3720 billion in excise duty on crude oil and petroleum products in the last financial year 2020-21; while the state governments collected Rs 2030 billion in sales tax and VAT on petrol and diesel. On the other hand, the government has to pay towards the redemption of outstanding oil bonds worth over 1000 billion rupees. What are oil bonds? Why did governments issue? Oil bonds were issued in lieu of cash subsidy to oil marketing companies (OMCs) in former Prime Minister Manmohan Singh’s UPA era, and also Atal Bihari Vajpayee’s NDA rule. These sovereign oil bonds, issued in favour of oil companies Indian Oil Corp, HPCL and BPCL, were transferable, allowing these companies to raise immediate cash at the time. The government, being the issuer, would bear the interest payments and redemption at maturity. During that time, OMCs were selling fuel at lower than international market prices to keep it affordable. The government compensated those companies for it The government has a liability to pay Rs 200 billion in the current fiscal year 2021-22 in the form of bond repayment and interest on the outstanding oil bonds. While for the next six years, the government has a total debt obligation worth Rs 1300 billion. Union Petroleum Minister Dharmendra Pradhan (before the recent Cabinet reshuffle) blamed the UPA regime for issuing oil bonds, saying that this is the main reason behind the hike in fuel prices. He said that the Congress-led UPA, left billions dues which the Modi government has to pay in the coming years. He also stated that there has been a rise in the prices of crude oil in the international market. To fulfill the domestic needs, India has to import 80 per cent oil, which is the main reason for the rise in petrol, diesel prices. Last month, Amit Malviya, national president of the IT cell of the BJP, in a tweet said that the increase in petrol and diesel prices has been a legacy of UPA’s mismanagement. “We are paying for the oil bonds that will come up for redemption starting FY2021 till (2026), which were issued by UPA to oil companies for not increasing retail prices then! Bad economics, bad politics,” a part of the tweet read. Total oil bonds payout stands at Rs 1300 billion. In the 2021-22 receipt budget, as per annexure 6E titled ‘Special Securities Issued to Oil Marketing Companies In Lieu Of Cash Subsidy’, pending liabilities related to oil bonds were Rs 1309.2317 billion. This means an amount of Rs 1309.2317 billion was the total value of pending oil bonds by the end of 2020-21.
Shell to join clean hydrogen project in Norway
Shell will join a project in Norway to produce hydrogen from natural gas while capturing the emissions, Aker Clean Hydrogen (ACH) said on Monday. Countries across Europe are looking at ways to produce emissions-free hydrogen to help reduce carbon emissions and avert global warming. Clean hydrogen can be produced from water using electricity generated by renewable energy sources. When produced from natural gas, it is considered clean when the associated carbon dioxide (CO2) emissions are captured and stored permanently. Today, most of the associated CO2 emissions are released into the atmosphere. Partners ACH, Shell and Norwegian infrastructure investor CapeOmega have signed a memorandum of understanding (MoU) to build a large-scale hydrogen production facility at Aukra in western Norway, ACH said. The clean hydrogen could be used to decarbonise local industries, for emissions-free fuel for vehicles and ships, or for export to Europe, ACH said. Natural gas for the project would be supplied from the Nyhamna gas processing plant nearby, it added. Shell serves as a technical service provider at the Nyhamna plant, which processes natural gas its Ormen Lange field and Equinor’s Aasta Hansteen field off Norway. The Anglo-Dutch energy firm, which aims to reduce its greenhouse gas emissions to net zero by 2050, is also a partner in a joint venture project with Equinor and TotalEnergies to build CO2 storage off Norway.
India’s first bio-CNG tractor aims at saving billions of rupees in fuel costs
Rawmatt Industries Private LTD is an organization that carries out a wide range of business activities in Nagpur. As part of its efforts to reduce pollution, it offers bio-CNG and other forms of natural gas. Due to its cost-effectiveness, CNG’s popularity has been growing multifold in recent years. Moreover, CNG comes with a reputation as one of the cleanest fuels in the market today due to the lower carbon content it burns, thereby making it cleaner than petroleum-based products. Furthermore, it produces the fewest emissions among all other fuels and contains significantly fewer pollutants than gasoline. India’s first CNG tractor was unveiled by Shri. Nitin Gadkari Ji at the Motilal Nehru Palace in New Delhi on 12th February 2021. According to Road Transport and Highway Minister, farmers will be able to save more than $1 trillion on fuel costs annually, which will improve their livelihoods. Narendra Singh Tomar, Dharmendra Pradhan, Parshottam Rupala, and General V.K. Singh were also in attendance at the unveiling ceremony. The biogas used to power the revolutionary tractors are produced in the absence of oxygen and comprise different gases, resulting from the breakdown of agricultural wastes, manure, municipal wastes, plant matter, sewage, green or food waste. When this mixture is further purified and processed, it is referred to as bio-compressed natural gas (bio-CNG). In India, bio-CNG is poised to take on the more widely used CNG and liquid petroleum gas (LPG). Additionally, bio-CNG can be applied in a variety of commercial (hotels, canteens, bakeries, and resorts), industrial (glass and ceramic, metal, cement, and textile processes), and automotive (public transport and personal vehicles) applications. Kaustubh Gupta, CEO, Rawmatt Industries said, “It is our objective to make India’s air free of fuel-related pollutants and make way for a greener, cleaner, and healthier future. And also to strengthen India’s CNG program cleaner, and healthier future.” Kaustubh Gupta, the current Advisor to MRN Group for the installation of bio-CNG plants, is an experienced CEO with years of experience behind him in the oil and energy industry. Son of Padmesh Gupta of Gupta Coal, the second generation entrepreneur holds a Bachelor’s degree in Business Administration, Management and Operations from James Cook University, along with expertise in business development. Furthermore, he also engages in converting farm waste to bio-CNG along with Nagpur Municipal Corporation (NMC). Rawmatt Industries PVT. LTD. believes integrity and innovation go hand in hand, especially in today’s dynamic and ever-changing world. The ultimate goal is to provide customers with the best possible service and constantly strive to improve the business by reviewing client feedback and implementing the latest technology. Rawmatt Industries PVT. LTD. undertakes initiatives to help farmers buy bio-CNG tractors by using Paryavaran cards. In exchange for paddy straw submissions, payment is credited to these Paryavaran cards which can be further used for cash withdrawal. This further helps with generating real-time data on actual paddy generated in order to facilitate the initiative on a nationwide level.