Calls to bring fuel under GST gets louder as prices soar
Anger is brewing over the rising fuel prices. Farmers and industrialists, who have to bear the brunt of the price rise, have urged the government to take immediate steps to curb the soaring rates. Petrol prices touched a record Rs 90.48 per litre on Monday in Jalgaon city, while diesel prices recorded all-time high of Rs 78.13 per litre. In Nashik city, petrol prices touched Rs 89.87 per litre on Monday, while diesel was selling at Rs 77.54 per litre on the same day. Petrol prices in Jalgaon have increased by 21 per cent in past 15 months from Rs 74.40 per litre in July last year to Rs 90.48 on Monday. Similarly, diesel prices in Jalgaon increased by 33.28 per cent in the same period from Rs 58.62 per litre in July last year to Rs 78.13 per litre on Monday. “The rain have disappeared for the past one month and my cotton crop is at stake. We are getting electricity for eight hours for agricultural pumps, but with frequent cuts. We have no option but to run water pumps on diesel generators. This is proving costly due to rise in fuel prices,” said Sonu Pawar, a farmer. Nivrutti Nyaharkar, another farmer, said that one hand the government is promoting mechanical farming, but all farming equipment is run on diesel. “Using farming machineries has become costlier,” he rued. Vijay Thakre, state co-ordinator of federation of all Maharashtra petrol dealers association said that falling value of rupee ratio, crude oil prices, state and central government’s taxes and daily fuel price revision were playing an important role in the rise. “The dollar and rupee valuation and crude oil prices are not in government’s hand, but it can reduce taxes and cess on fuel,” he said. “The fuel prices are continuously rising and it cannot be brought down unless it is brought under goods and services tax. The GST council can take the decision in this connection,” said Santosh Mandlecha, state president of Maharashtra chamber of commerce, industry & agriculture. Bhuvaneshwar Singh, president Jalgaon Industries Association, alleged that the government is deliberately ignoring the rising fuel prices. “The government seems to be mobilising funds which the Centre and state government need to fill up the deficit created due to farm loan waivers,” he alleged. He claimed that the government will definitely bring fuel under GST a month or two before Lok Sabha elections are declared next year so that the fuel prices will suddenly become cheaper by Rs 25-30 per litre. “The memory of common man is short lived. They forget everything after a few days. Hence, I think this is the government strategy,” said Singh. Joshua Garnett Authentic Jersey
Fuels Must Be Brought Under GST Ambit, Council Should Take Decision, Says Petroleum Minister
Union Minister Dharmendra Pradhan spoke to the media on fuel prices, reiterating his stand on bringing the fuels under the GST ambit. He said, “I want petrol and diesel to come under the ambit of GST. The GST Council should take a decision on this.” The minister clearly shifted the onus for bringing about the change on the state governments, Pradhan said, “The state governments are more powerful than the Centre in GST Council meeting. He also called out the Odisha government to follow suit of the other state governments and reduce VAT on both petrol and diesel. He said, “I request Odisha CM Naveen Patnaik to reduce VAT on petrol & diesel like other state governments. The Central Government had already deducted excise duty on petrol and diesel a few months ago.” Pradhan has, all this while, maintained that the Government was concerned about the fuel prices and was working on a long-term solution. He has also repeatedly asked the state governments to tax petrol and diesel within a reasonable and responsible band and not “continue to reap a bonanza from rising oil prices”. Glenn Robinson Authentic Jersey
Niti Aayog halts Oil India’s CGD plans
The Niti Aayog has denied ‘permission’ to state-run Oil India (OIL) to venture into the country’s reinvigorated city gas distribution (CGD) business, arguing that exploration companies must focus on their core activities given the country’s stagnant oil production. An OIL-HPCL consortium had won bids for two geographical areas (GAs) — Ambala and Kurukshetra in Haryana, and Kolhapur in Maharashtra — during the eighth round of CGD bidding in 2017. Under the guidelines issued by department of public enterprises in 2016, a PSU looking to create a JV with other companies needs to obtain approval from the Niti Aayog. The move by the think-tank is at odds with the government’s policy of encouraging integrated oil and gas businesses in the public sector via mergers of PSUs to create world-class entities. Last year, ONGC, the country’s largest explorer, acquired 51% in downstream company HPCL under a government directive. Also, oil marketing companies like IOC and BPCL have interests in domestic and overseas exploration blocks and crude and product pipelines. The hurdle put by the public-sector think-tank would mean means that residents of the two GAs would have to wait longer to get piped gas connections in their houses and run their cars on compressed natural gas (CNG). OIL had also won CGD rights for two other GAs (Cachar, Hailakandi and Karimganj; Kamrup and Kamrup Metropolitan) in Assam in consortium with Assam Gas Company and GAIL (India) in the recently concluded ninth round of CGD. According to an OIL executive, the firm is apprehensive that these JVs may also hit the Niti Aayog wall. An official from the ministry of petroleum and natural gas said: “These (upstream) companies want to expand in the downstream sector and share risk as the returns in the CGD business comes over a period of time.” The OIL official said certain queries were raised by Niti Aayog and though OIL replied to them, the JV application hasn’t yet been cleared. “We will take up the issue with the petroleum ministry,” added the official. An HPCL executive said the queries raised by the think-tank are not directed at HPCL. Apart from winning one GA in the ninth round of CGD, HPCL already has three gas distribution JVs—Aavantika Gas and Bhagyanagar Gas with GAIL, and Godavari Gas with Andhra Pradesh Gas Development Corp which again is a JV between GAIL and the state government. The HPCL executive, however, expressed optimism that the issue would likely be sorted and said the combined entity was going ahead with the plan. Firms winning CGD licences for a particular GA are allowed to sell CNG and piped cooking gas in that area. In the latest ninth round, the Petroleum and Natural Gas Regulatory Board (PNGRB) offered 86 GAs covering 174 districts in 22 states and union territories i.e. 24% of India’s area and 29% of population. The government aims to connect 10 million households with piped gas by 2020, which is in line with increasing the share of natural gas in the primary energy basket of the country to 15% from 6% over the next few years. The existing CGD operators include Indraprastha Gas and GAIL Gas which serve a population of 240 million through 4.2 million domestic connections and 3.1 million CNG vehicles. Barry Church Jersey
Cheniere signs 15-year LNG sales pact with oil trader Vitol
Cheniere Energy said on Monday that it signed a 15-year agreement to supply liquefied natural gas (LNG) to the world’s largest oil trader, Vitol Inc. Cheniere said it will sell 700,000 tonnes of LNG every year to Vitol, starting 2018 and the purchase price will be pegged to the Henry Hub monthly average, plus a fee. The United States has become a major LNG exporter in the last two years, mostly due to the ramp up of Cheniere’s Sabine Pass terminal in Louisiana. Houston-based Cheniere is also building the Corpus Christi terminal in Texas. An executive of Switzerland-based Vitol said earlier in May that its future growth would increasingly be driven by gas and LNG, especially in emerging markets. Max Pacioretty Authentic Jersey
Shell targets lower methane emissions from oil and gas operations
Royal Dutch Shell announced on Monday plans to limit emissions of methane, a potent greenhouse gas, across its oil and gas operations. Shell aims to maintain methane emissions intensity below 0.2 per cent by 2025, it said in a statement, joining British rival BP, which last year set a similar goal. Methane is released into the atmosphere mostly through leaks in gas infrastructure such as pumps and pipelines. The gas has a bigger impact than carbon dioxide, even though the oil and gas industry produces less methane and the gas also has a shorter lifetime. The methane target will be measured against a baseline leak rate, which is currently estimated at range from 0.01 per cent to 0.8 per cent across the company’s oil and gas assets, it said. The Anglo-Dutch company set out last year an ambitious plan to halve its carbon emissions by 2050, far exceeding rivals. Investors have called on the company to set binding targets to reach those goals. Jay Bruce Jersey
City gas retail licence: Adani, IOC, BPCL, Torrent Gas emerge big winners
Oil regulator PNGRB on Monday declared the final list of winners of city gas retailing licences that had Gautam Adani’s group, state-owned Indian Oil Corp, Bharat Petroleum Corp Ltd and Torrent Gas as the big winners. Adani Gas won rights to retail CNG to automobiles and piped cooking gas to households and industries in 13 cities on its own and another nine, including Allahabad, in a joint venture with IOC, according to results of 84 cities that were auctioned in the country’s biggest city gas distribution (CGD) bid round. According to the list of winners put out by the Petroleum and Natural Gas Regulatory Board (PNGRB), IOC on its own won rights to seven cities, including Coimbatore and Salem in Tamil Nadu, and Guna in Madhya Pradesh. Bharat Gas Resources Ltd, a unit of state-owned BPCL, won a licence for 11 cities like Amethi and Rai Bareli in Uttar Pradesh and Ahmednagar in Maharashtra, while Torrent Gas Pvt Ltd made 10 winning bids that included ones for Chennai, Alwar in Rajasthan, Moradabad in Uttar Pradesh and Karaikal in Puducherry. State gas utility GAIL’s retailing arm, GAIL Gas, managed rights for five cities, including Dehradun. Indraprastha Gas Ltd, the firm that retails CNG in the national capital, won city gas rights for Meerut and Muzaffarnagar in Uttar Pradesh. Hindustan Petroleum Corp Ltd (HPCL) and Gujarat Gas won rights for one city each while Green Gas got licences for two and Maharashtra Natural Gas Ltd for three. Other winners Other winners included smaller players like IRM Energy, Haryana City Gas, Essel Gas, Megha Engineering & Infrastructure Ltd, Tripura Natural Gas, and Assam Gas. PNGRB said a total of 4,346 CNG stations have been committed to be set up in the 84 Geographical Areas (GAs) in eight years. Also, the entities have committed to provide 2.1 crore piped natural gas connections to households kitchens by September 30, 2026. When the ninth CGD bidding round closed in July, IOC, BPCL and Adani Gas were the top bidders. As many as 86 cities were offered in the bid round but results of two have been withheld pending legal challenge mounted by certain bidders. Of the 86 cities offered for retailing of CNG to automobiles and piped cooking gas to households in the ninth CGD bid round, IOC bid for 34 cities on its own and another 20 in partnership with Adani Gas. Adani Gas on its own bid for 32 cities. Bharat Gas Resources Ltd bid for as many as 53 cities, while GAIL Gas Ltd put in offers for 34 cities. Gujarat-based Torrent Gas Pvt Ltd bid for 31 cities, while Gujarat Gas Ltd put in offers for 21 areas. Petronet LNG Ltd, India’s largest liquefied natural gas importer, sought to foray into CGD business by bidding for a licence in seven cities but drew a blank. Indraprastha Gas Ltd had put in bids for 11 cities. PNGRB said the ninth CGD bidding round was launched on April 12 for development of city gas networks for the 86 geographical areas (GAs) which includes 174 districts (156 complete and 18 part), spread over 22 states and Union Territories (UTs) in India. The present round will double the city gas coverage. At present, CGD authorisation has been given by PNGRB for 92 GAs covering 124 districts spread over 23 States and UTs. Markus Naslund Womens Jersey
US aims to start LNG deliveries to Germany in four years
US companies expect to begin delivering liquefied natural gas (LNG) to Germany in four years at the latest and will challenge Russia which now accounts for 60 percent of German gas imports, the deputy US energy secretary told a German newspaper. “US liquefied natural gas is coming to Germany. The question is not if, but when,” Dan Brouillette told the mass circulation daily Bild in an interview published on Monday. US President Donald Trump in July accused Germany of being a “captive” of Russia due to its energy reliance and urged it to halt work on the $11 billion, Russian-led Nord Stream 2 gas pipeline that is to be built in the Baltic Sea. Germany rejects this charge and says it is open to diversifying its energy sources, but says sales will ultimately be determined on economic grounds. Brouilette, who acknowledged US LNG would cost more, said the entry of US suppliers onto the German market would effectively set a price ceiling for Gazprom, the Russian state energy company that leads the Nord Stream 2 consortium, and other suppliers. “Because US LNG is here, Gazprom cannot demand whatever it wants,” Brouillette, who met with German business executives in Berlin last week, told the newspaper. US Ambassador Richard Grenell told the newspaper that Chancellor Angela Merkel had assured Trump personally that Germany wanted to purchase US LNG supplies. The debate about German LNG imports has flared up in recent weeks as operators and the government have shown an interest in diversifying away from pipeline gas arriving from Russia, Norway and the Netherlands. Qatar has also expressed interest in selling LNG to Germany. German firms are considering building an LNG terminal in Germany, as gas demand rises in Europe and the Netherlands, one of Germany’s crucial suppliers which is winding down its giant Groningen field and plans to close it in 2030. Francisco Lindor Authentic Jersey
Govt to appeal against panel’s rejection of its $1.5 bn claim on RIL
The Law Ministry has held that an international arbitration panel’s ruling rejecting the government’s demand for $1.5 billion from Reliance Industries and its partners for allegedly siphoning gas from fields of ONGC is a fit case for appeal, sources in know of the development said. The Oil Ministry had sought an opinion of the Law Ministry on the July arbitration award going against the government. Sources said the Law Ministry was of the opinion that the majority arbitration award was in violation of the terms and conditions of the production sharing contract (PSC), lacked required reason and was against the public good and public interest. A three-member international arbitration tribunal by a majority vote in July held that Reliance could contractually produce and sell any gas that might have migrated from adjoining fields of state-owned Oil and Natural Gas Corp (ONGC) into its area and that it was not obligated to seek prior permission of the government for doing so. Sources said the Law Ministry was of the opinion that the tribunal had ignored the contractual obligation and statutory duty on part of operators to furnish information to the government about any migration of gas. It felt the award is a fit case for a challenge in the High Court, they said. With one member dissenting, the arbitration panel had held that the production sharing contract for eastern offshore KG-D6 fields “does not prohibit but permits” Reliance “to produce and sell gas which migrated into the sub-sea reservoir lying within (its) Contract Area from a source outside the Contract Area”. And so “there is no question of ‘unjust enrichment’,” it had held. Reliance “has not been and will not be unjustly enriched by any production of migrated gas as a result of Petroleum Operations conducted within its Contract Area”. In his dissent note, G S Singhvi said that the PSC prohibits Reliance and its partners from producing and selling gas which migrated into their sub-sea reservoir from the contract area of ONGC. He held that Reliance “unjustly enriched itself by the sale of migrated gas, which did not belong to it and, therefore, it is bound to restore those benefits to the Government”. In the 107-page order, the arbitration tribunal headed by Singapore-based arbitrator Lawrence G S Boo stated that although Reliance had always accepted that there could be channel continuity between its KG-D6 block and ONGC’s adjoining KG-D5 and IG block, its conduct is consistent with its position that ‘reservoir connectivity’ has not been proven. Bernard Eder, a former UK High court judge nominated by Reliance, was the other judge who concurred with Boo. Singhvi, a former Supreme Court judge and the government nominee on the panel, wrote a long dissent note. “The Claimant (Reliance) requires no further express permission to produce and sell any migrated gas that could have come into (its) Contract Area,” the majority judgment held. On the company not informing the government of a report commissioned by its partner Niko Resources indicating connectivity between KG-D6 and neighbouring blocks of ONGC, the tribunal said “the alleged failure to furnish information if so proven would at best be a breach of the contractual terms of the PSC or at worst attract penal sanctions under the Petroleum and Natural Gas (PNG) Rules”. “There is no logical nexus between such breach or non-compliance with the claimant’s right to extract gas which might include gas which could have migrated from an area outside the Contract Area. These are distinct and discreet issues,” it said. The tribunal had said though Reliance’s “production of gas would have included gas which had migrated into the reservoir from a source outside the Contract Area”, it is “entitled to all rights granted to it under the PSC and shall be entitled to retain and recover cost petroleum and profit petroleum from the gas so extracted, produced and sold”. The panel also awarded USD 8.3 million compensation to the three partners. Reliance is the operator of KG-D6 block with 60 per cent interest, while BP plc of UK holds 30 per cent and Niko Resources of Canada the remaining 10 per cent. In his dissent note, Singhvi said Reliance was required to obtain explicit permission to produce migrated gas. “It is crystal clear that the claimant (Reliance) does not have any rights to the gas which has migrated from ONGC’s blocks,” he wrote. “There can be no doubt that the retention of the benefit of migrated gas would be ‘against the fundamental principles of justice or equity and good conscience’ thereby falling squarely within the ambit of the doctrine of unjust enrichment”. He also held that quantification of migrated gas determined in D&M report of 2015 was conclusive. Stating that Reliance should have disclosed the 2003 report of its partner Niko Resources, he said it may not have conclusively established reservoir connectivity, but it strongly suggested the same. “It is held that the claimant’s failure to comply with its obligation to disclose November 2003 D&M report to the Government constitute a breach of the terms of the PSC and the 1959 Rules,” he wrote. “Under the PSC, if a reservoir extends beyond block boundaries, the contractor may either seek permission to enlarge its Development Area, or jointly develop the area with the contractor of the adjoining block, or relinquish its rights to such reservoir,” he said. “There can be no effective lease or enjoyment of an area covered by a reservoir, if such reservoir is being drained by a different person on its block boundary.” The ministry had on November 4, 2016, slapped a demand notice on Reliance-BP-Niko combine for producing in seven years ending March 31, 2016 about 338.332 million British thermal units of gas that had seeped or migrated from ONGC’s blocks into their adjoining KG-D6 in the Bay of Bengal. Reliance on November 11, 2016, slapped an arbitration notice disputing the claim. Trae Waynes Authentic Jersey
Modi Government forced state companies to fund publicity exercise
Nobody can accuse the Narendra Modi-led government at the Centre of being publicity-shy. In four years, it has spent ?43.43 million for advertisements and publicity in various media, a Right to Information enquiry revealed in May this year. But documents accessed by a citizen Neeraj Sharma, again through the RTI route, show that the figure could be higher. The documents show how Public Sector Undertakings (PSUs), including Navaratna companies, were forced to cough up at least ?8 million for the Bharatiya Janata Party-led government’s Sabka Saath Sabka Vikas Sammelan campaign at the end of the government’s three-year tenure. Documents accessed by National Herald show that PSUs like Oil and Natural Gas Corporation (ONGC), Gas Authority of India Limited (GAIL), NBCC India Limited, Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), National Thermal Power Corporation (NTPC), Bharat Petroleum Corporation Limited (BPCL), Rural Electrification Corporation Limited (REC), National Highways Authority of India (NHAI), Power Grid Corporation of India Limited (PGCIL) and others organised approximately between 550 and 575 events throughout the country for the Modi government’s three-year celebrations named Sabka Saath Sabka Vikas Sammelan. While the PSUs initially dithered to part with the information, they relented after the applicant moved the Central Information Commission and the Commission directed them to comply. The documents reveal that the average cost of an event was ?1.5 million. For 550 events, thus, the cost comes to ?820 million. The Commission has, in fact, issued show cause notices to GAIL and IOCL for denying the information under RTI. In some cases, cost of events ran upwards of ?3 million Public Sector Undertakings belong to the people of the country. The Modi Government needs to explain why their coffers were raided to benefit a particular party. GAIL has spent ?12.7 million to hold 8 programmes. Oil India Limited has spent ?35.5 million to hold 10 programmes. HPCL, in its reply, stated that it spent about ?62.5 million for 44 programmes. NBCC spent around ?15 million to hold 21 programmes. While NTPC did not part with information on the money spent after the 48 programmes it organised, it said it spent ?1.38 million plus taxes to produce a film on the Sabka Saath Sabka Vikas theme. ONGC spent close to ?32 million for 18 programmes. PGCIL spent close to ?15.5 million for 9 programmes. REC spent close to ?10 million and organised 9 programmes. IOCL spent ?101.5 million and held 88 programmes. Interestingly, a circular calling upon all ministries to liaise with PSUs under them was sent out by the Information and Broadcasting Ministry. It is signed by the Secretary of the ministry. In another letter, also signed by the Secretary in the ministry, chief secretaries of various state governments are intimated about the events and locations chosen in their states and are asked to extend all cooperation and help All these events were coordinated by a central team of bureaucrats and, surprisingly, all the information was uploaded on a portal (sssvs.in) which was registered in the name of one Abhinav Jerath. National Herald contacted Mr Jerath and he said he was a web developer and developed the website at the request of a client whose name he could not divulge. The portal, which is now inactive, had the State Emblem of India, the Prime Minister’s photograph and that of Deen Dayal Upadhyay on its homepage. If this was a government initiative, why was the domain in the name of an individual and a private web developer? What was Bharatiya Jan Sangh founder Deen Dayal Upadhyay’s picture doing on the homepage of a sarkari website? If this was not a government initiative, what was India’s State Emblem doing on the website’s homepage? These are some of the questions the government ought to answer. That this had less to do with the government and more to do with the party becomes apparent from the RTI reply of NBCC, which mentions BJP party functionaries and those of associated organisations like Bharatiya Janata Yuva Morcha who were to be contacted and coordinated with for holding the programmes. One has to keep in mind that these costs are exclusive of Directorate of Advertising and Visual Publicity expenses and other publicity expenses. At a time when manufacturing was down, exports had fallen from its March 2014 high and the economy was reeling under the effects of demonetisation, the Modi government did not bat an eyelid to force PSUs to shell out money to garner publicity for political gain. PSUs belong to the people of the country. The government needs to explain why their coffers were raided to benefit a particular party. Fletcher Cox Jersey
Three suggestions for lowering fuel prices at the pump
The government is undoubtedly taking several steps to combat the price of petrol at the pump as well as to shore up the value of the Rupee versus the Dollar. I have written several times about how the Direct cost of petrol (from a rising Crude price) impacts the indirect cost of commodities such as Rice, Wheat, Onion etc[1]. The impact from a rise on Petrol of 1 rupee can be as much as 4 rupees on the commodities. Prices of Onion, Rice, Wheat will all rise just around the December elections for various states and the coalition in power at the Centre will be blamed. Here are three suggestions for the importers of crude and producers of petroleum that will help keep the price rise to as low as possible. This is your chance to make a contribution to the Bharat Varsha. Impress upon the Government to talk to their United States (US) counterparts to allow this. It takes two to tango and India is dancing with the US now… Three suggestions 1. Stop buying spot prices – that too at a premium. If true, this suggests that you are maybe over-invoicing your imports, by routing purchases through various shell corporations. Be transparent, declare your purchase price (this should be the same as what France and the United Kingdom pay), from crude producers like Saudi Arabia and Nigeria. The interactive graphic below shows the spot prices for the first few monthsof 2018… 2. Buy from Iran, which is willing to give an 18-20% discount on the spot prices and who is also willing to accept the rupee as part payment. Impress upon the Government to talk to their United States (US) counterparts to allow this. It takes two to tango and India is dancing with the US now… 3. Do not under-invoice your refined petroleum/ diesel exports. This has long been alleged and with increasing data analytics at the disposal of the investigative agencies, you will be caught. How about for once, taking a hit for the cause of the country? Trust me when I say this – there is more joy in giving than getting. Are you listening? Dave Winfield Womens Jersey