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The government on Thursday more than doubled the price of natural gas that is used to produce electricity, make fertilisers, turned into CNG and piped to household kitchens for cooking, on the back of a spike in global energy prices. The price of gas produced from old regulated fields, such as the nation's largest gas field of <keyword id="671886" type="General" weightage="80" keywordseo="bassein" source="Orion">Bassein</keyword> of <keyword id="6354737" type="General" weightage="80" keywordseo="ongc" source="Orion">ONGC</keyword>, will rise to a record high of USD 6.10 per million British thermal unit (mmBtu) from the current USD 2.90 per mmBtu, according to the oil ministry's Petroleum Planning and Analysis Cell (<keyword id="821764" type="General" weightage="50" keywordseo="ppac" source="Orion">PPAC</keyword>). The new price, which is likely to result in a hike in CNG and piped cooking gas rates, will be for six months beginning April 1. Petrol and diesel prices have been raised nine times in the last 10 days, totalling Rs 6.4 per litre while cooking gas LPG rates too have gone up by Rs 50 per cylinder. The latest gas price hike will further fuel inflation. The rate applicable to newer and difficult fields such as ones of <keyword id="6487" type="General" weightage="50" keywordseo="reliance-industries-ltd" source="Orion">Reliance Industries Ltd</keyword> in deepsea KG-D6 block, will get USD 9.92 per mmBtu for April-September as compared to current USD 6.13 per mmBtu, the PPAC notification said. These are the highest prices ever paid to Indian gas producers. The government sets the price of gas every six months -- on April 1 and October 1 -- each year based on rates prevalent in gas surplus nations such as the US, Canada and Russia. The increase in gas price is likely to result in a 10-15 per cent rise in CNG and piped cooking gas rates in cities such as Delhi and Mumbai, industry sources said. Prashant Vasisht, Vice President and Co-Head, Corporate Ratings, ICRA Ltd, said: "The domestic gas price increase was driven by the significant run up in the prices of gas at global gas hubs. The increase in gas prices provides relief to Indian upstream producers as at earlier prices, gas production was a loss-making proposition for most fields for the Indian upstream producers." CNG and piped cooking gas supplies in cities come from the gas produced by ONGC. The price hike will also lead to a rise in the cost of generating electricity but consumers may not feel any major pinch as the share of power produced from gas is very low. Similarly, the cost of producing fertiliser will also go up but as the government subsidises the crop nutrient, an increase in rates is unlikely. This is the second straight hike in prices and betters USD 5.05 paid to ONGC and Oil India Ltd for old fields between November 2014 and March 2015 and USD 9.32 to newer fields in April-September 2019. The new rates reflect the spike in prices at the global benchmarks - US-based Henry Hub, Canada-based Alberta gas, UK-based NBP and Russia gas as well as in rates of liquefied natural gas (LNG) in 2021 following a supply crunch with return of demand after devastation by pandemic. Domestic rates are fixed based on volume weighted average price in a year in these global benchmarks with a lag of one quarter. So, the price for April 1 to September 30 is based on the average price from January 2021 to December 2021. This is the period when global rates shot through the roofs. For difficult fields like discoveries in deepwater, ultra-deepwater and high pressure-high temperature areas, a slightly modified formula is used by incorporating the price of LNG, which too had shot through the roof in 2021. Reliance-bp operated KG fields are classified as difficult fields. Such field operators are allowed to discover market price but this is subject to cap fixed for the difficult fields twice every year. For producers, this will be the first time in six years that they will get a remunerative price. ONGC had been incurring losses on the 65 million standard cubic meters per day of gas it produces from domestic fields shortly after the government in November 2014 introduced a new gas pricing formula that had "inherent limitations" as it was based on pricing hubs of gas surplus nations. The sources said ONGC had in several communications to the government stated that the break-even price to produce gas from new discoveries was in the range of USD 5-9 per mmBtu and that for old fields such as Mumbai High and Bassein is about USD 3.6-3.7 per mmBtu. The Congress-led <keyword id="6355364" type="General" weightage="50" keywordseo="upa" source="Orion">UPA</keyword> had approved a new pricing formula for implementation in 2014 that would have raised the rates, but the BJP-led government scrapped it and brought a new formula. The new formula takes into account the volume-weighted annual average of the prices prevailing in Henry Hub (US), National Balancing Point (the UK), Alberta (Canada), and Russia with a lag of one-quarter. The rate at the first revision, using the new formula, came to USD 5.05 per mmBtu but in the subsequent six-monthly reviews kept falling till it touched USD 2.48 per mmBtu for April 2017 to September 2017 period. Subsequently, it rose to USD 3.69 per mmBtu in April 2019-September 2019 before being cut in subsequent rounds to USD 1.79 per mmBtu. PTI ANZ MR SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/microsoft-to-support-indian-entrepreneurs-launches-startups-founders-hub-in-india/articleshow/90560191.cms">Microsoft to support Indian entrepreneurs, launches 'Startups Founders Hub' in India</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/mukesh-ambani-and-gautam-adanis-net-worth-is-now-more-than-100-billion/articleshow/90564692.cms">Mukesh Ambani and Gautam Adani are now worth more than $100 billion</a>

Government doubles gas prices; CNG rates might go up

As the world experiences a major drop in oil prices, India decided to go for a 18% cut in the price to be paid to producers of natural gas to $2.5 per million British thermal unit (mbtu). 
 "The price of domestic natural gas for the period October 1, 2016 to March 31, 2017 is $2.50 per mbtu on Gross Calorific Value (GCV) basis," said a notification issued by the government's <keyword id="503200" type="ORGANIZATION" weightage="20" keywordseo="Petroleum-Planning-Analysis-Cell">Petroleum Planning &amp; Analysis Cell</keyword> (<keyword id="821764" type="ORGANIZATION" weightage="20" keywordseo="PPAC">PPAC</keyword>). 
 
The rate valid till Friday is $3.06 per mbtu. 
 
This is the fourth reduction in 18 months as per the new gas pricing formula approved in October 2014. Gas prices are to be revised every six months and the next change is due on April 1. 
 
The petroleum ministry also announced a sharp reduction in cap price based on alternate fuels for undeveloped gas finds in difficult zones like deep-sea, high-temperature, high-pressure areas which are unviable to develop as per the existing pricing formula. 
 
The cap for October 1, 2016 to March 31, 2017, for gas from difficult areas will be $5.3 per mbtu, down from $6.61 in the preceding six-month period ending on Friday, the PPAC notification said. 
 Under the new pricing formula, rates are calculated by using prevailing price in gas surplus nations like the US, <keyword id="6358826" type="COUNTRY" weightage="20" keywordseo="Russia">Russia</keyword> and <keyword id="6356687" type="COUNTRY" weightage="20" keywordseo="canada">Canada</keyword>. Indian gas prices are calculated by taking weighted average price at <keyword id="265673" type="PERSON" weightage="20" keywordseo="Henry-Hub">Henry Hub</keyword> of the US, National Balancing Point of the UK, rates in <keyword id="165372" type="CITY" weightage="20" keywordseo="Alberta">Alberta</keyword> (Canada) and Russia with a lag of one quarter. 
 
It is being estimated that the price cut should result in a reduction of 50 paise to Rs 1.50 per standard cubic metre in the price of piped natural gas (PNG) for domestic consumers and an 80 paise to Rs 1.5 per kg cut in CNG prices.

​ Good news: Price of cooking gas to come down

The government has approved a 20 per cent premium over the regulated or <keyword id="22761099" type="General" weightage="20" keywordseo="APM-price" source="keywords">APM price</keyword> for any <keyword id="19896179" type="General" weightage="20" keywordseo="natural-gas" source="keywords">natural gas</keyword> that <keyword id="19923397" type="General" weightage="20" keywordseo="ONGC" source="keywords">ONGC</keyword> will produce from <keyword id="22761098" type="General" weightage="20" keywordseo="new-wells" source="keywords">new wells</keyword>, the company said on Monday. Currently, two pricing regimes govern the majority of the domestic production of natural gas, which is used to generate electricity, produce fertiliser, turn into CNG for running automobiles and piped to households for cooking. Gas produced from legacy or fields given to state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd, on nomination basis, is priced at 10 per cent of the prevailing price of crude oil that India imports. This price, subject to a cap price of USD 6.5 per million British thermal units, is called regulated or APM price. So, at the current Indian basket price of USD 77 per barrel, the APM price for gas produced from ONGC's Mumbai High and Bassein fields in the western offshore should come to USD 7.7 per mmBtu, but it is paid the cap price of USD 6.5. Gas produced from difficult fields, such as those in the deep sea, is governed by a different formula and paid a higher rate because of the higher cost involved in its production. That price for six months starting April 1 is USD 9.87 per mmBtu. When these formulas were adopted last year, it was decided that gas produced from new wells, even in legacy fields, would be paid a premium of 20 per cent over the APM price. Now, that has been notified. "As per guidelines for domestic gas pricing, domestic natural gas price (APM price) was fixed at 10 per cent of the Indian crude basket price as announced by Petroleum Planning and Analysis (PPAC) on a monthly basis. It was provided in the guidelines that for the gas produced from new wells or well intervention in the nomination fields of ONGC/Oil India Limited, there would be a premium of 20 per cent over APM prices -- a total of 12 per cent of Indian crude basket price for new gas. "The modalities for the same had to be worked out by the Directorate General of Hydrocarbon (DGH) for approval of the Ministry of Petroleum and Natural Gas (MOPNG)," ONGC said in a statement. The ministry, it said, has now notified the allocation of gas produced from new wells or well interventions from nominated fields of ONGC/OIL at a 20 per cent premium over the APM price. "The enhanced price for new gas will make the new gas development projects viable and help the ONGC to augment the production of natural gas from nominated fields in challenging areas that require higher amounts of capital and technology. "This will enhance the investment capacity in the company to take up development projects, which are otherwise capital intensive and involve a higher degree of risks requiring commensurate prices," it said. ONGC Board has recently approved the Daman Upside Development project in its nominated field of Mumbai High for Rs 7,800 crore for increasing domestic gas production, and the job has already been awarded for execution. The peak production envisaged from this project is around 5 million standard cubic metres per day. The board has also approved another project integrated development of 4 contract areas under DSF-II at a project cost of Rs 6,000 crore with peak production of around 4 mmscmd of gas where the government has already allowed pricing and marketing freedom under the DSF Policy. The job has already been awarded for the execution of this project. "The implementation of policy decision aligns with the national vision of achieving the target of share of natural gas in the Indian energy basket from 6 per cent to 15 per cent by 2030," ONGC added. 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Govt approves 20% premium for gas from new wells for ONGC

<keyword id="875425" type="General" weightage="20" keywordseo="Excise-duty-on-petrol" source="Orion">Excise duty on petrol</keyword> went up by a huge 194 per cent while on diesel it rose by a stupendous 512 per cent between 2014-15 and 2021-22 even as crude oil prices remained below $80 per barrel between 2015-16 and 2021-22, thus burdening the common man. The government's revenue generation through levy of excise duty saw a growth of 126 per cent between 2014-15 and 2021-22. The income growth was 186 per cent during the same period. According to official data provided by the Petroleum Ministry's Petroleum Planning and Analysis Cell (PPAC), excise duty on petrol was Rs 9.48 per litre and on diesel it was Rs 3.56 per litre in 2014-15 when the NDA government had come to power. In 2021-22, excise duty on petrol rose 194 per cent to Rs 27.90 per litre and on diesel it rose 512 per cent to stand at Rs 21.80 per litre. Interestingly between 2015-16 and 2021-22, while excise duties on petrol and diesel rose steadily, crude oil prices remained consistently below $80 per barrel and even slid below the $50 per barrel mark on three occasions. While crude oil was at $84.16 per barrel in 2014-15, it fell sharply to stand at $46 per barrel and $47 per barrel in 2015-16 and 2016-17 respectively. A closer analysis of the data reveals that between 2015-16 and 2016-17 when crude oil prices were down by almost half of the 2014-15 levels, excise duty on petrol rose from Rs 17.48 per litre to Rs 21.48 per litre. During the same period, <keyword id="2596949" type="General" weightage="20" keywordseo="Excise-duty-on-diesel" source="Orion">excise duty on diesel</keyword> rose from Rs 10.26 to Rs 17.33 per litre. Thus during 2015-17, <keyword id="7173340" type="General" weightage="20" keywordseo="excise-duty-on-petrol-and-diesel" source="Orion">excise duty on petrol and diesel</keyword> rose by 22.9 per cent and 68.2 per cent respectively, when crude oil prices were in the range of $46-$47 per barrel. Even in 2020-21, when crude oil prices fell sharply to $44.82 per barrel from $60.47 per barrel in 2019-20 due to the onset of the coronavirus pandemic, excise duty on petrol rose from Rs 19.98 per litre on March 13, 2020 to Rs 32.90 per litre on February 2, 2021. A rise of Rs 13 per litre in a span of less than a calendar year. Similarly excise duty on diesel stood at Rs 15.83 per litre on March 13, 2020. However on February 2, 2021 it rose by Rs 16 to stand at Rs 31.80 per litre. With the continuous rise in excise duty between 2014-15 and 2021-22 (barring a few cuts like the one effected in November 2021), there has been a steep rise of 186 per cent in the government's earnings through levy of excise duty during the period under consideration. In 2014-15, the total contribution to the exchequer was Rs 1,72,065 crore through this levy, which rose by 186 per cent to reach Rs 4,92,303 crore in 2021-22. The government's revenue growth through this levy during this period was also up by 126 per cent. In 2014-15, it earned a revenue of Rs 15,85,922 crore through excise duty on petrol and diesel, which went up to Rs 35,95,813 crore in 2021-22. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/news/queen-elizabeth-ii-remembering-her-visits-to-india/slidelist/94093345.cms">Queen Elizabeth II’s special connection with India</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/ranbir-kapoors-brahmastra-wipes-out-over-800-crore-wealth-of-pvr-and-inox-investors/articleshow/94095579.cms">Brahmastra wipes out over ₹800 crore wealth of PVR and Inox investors</a>

Levies on on petrol, diesel jump even as crude remains below $80/bbl

<ul><li>Petrol and diesel prices are all set to increase further this year.</li><li>Natural gas prices could also see a major increase, according to analysts at CLSA.</li><li>Petrol and diesel prices have already surged by 20% this year so far, while Brent crude has surged by over 50% in the same period.</li></ul>Petrol and diesel prices could increase once again after cooling down for a few weeks, as <keyword id="102132" type="General" weightage="20" keywordseo="crude-oil-prices" source="Orion">crude oil prices</keyword> rose for the fourth consecutive day to touch a 3-year high. Prices of Brent crude were trading at $77.65 per barrel, the highest since October 2018. For comparison, during the peak of the first wave of COVID-19 last year, Brent crude was <a href="https://www.businessinsider.in/business/news/crude-oil-prices-didnt-fall-below-zero-futures-did-and-heres-what-it-means/articleshow/75264639.cms">trading at $25 levels per barrel</a>. India mostly imports Brent crude, so the record surge in its prices is very likely to have a direct impact on petrol and diesel prices in India. "Crude prices appear to be on a one-way street that is headed higher, with risk appetite running wild," said Edward Moya, senior market analyst at OANDA, according to a Reuters <a href="https://www.reuters.com/business/energy/oil-looks-set-test-3-year-high-supplies-tighten-2021-09-24/">report</a>. Here’s how much <keyword id="45185" type="General" weightage="20" keywordseo="crude-oil" source="Orion">crude oil</keyword>, petrol and diesel prices have increased this year: <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Price as on Jan 1, 2021 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Price as on Sept 23, 2021 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Change </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Crude oil </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">$51.09 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">$77.38 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">51% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Petrol </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹83.71 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹101.19 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">21% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Diesel </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹73.87 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹88.62 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">20% </td></tr></tbody><tbody></tbody><tbody></tbody></table> Source: PPAC, Investing.com, Crude oil prices per barrel, Petrol and Diesel prices per litre According to the analysts at CLSA, there are more price increases in store. The research firm notes that domestic gas prices are set to rise up to 70% in October 2021 to $3.3 per mmBtu, and doubling to $6.7 in April 2022. For context, natural gas prices were at $1.43 per mmBtu in June 2020. <cmsannotation type="cmsannotation" annotationid="How do I offset the inevitable increase in petrol, diesel and natural gas prices?" comment="subhead" text="How do I offset the inevitable increase in petrol, diesel and natural gas prices?">How do I offset the inevitable increase in petrol, diesel and natural gas prices?</cmsannotation> One way of offsetting the inevitable increase in petrol, diesel and natural gas prices ⁠— if you have investible surplus ⁠— is by investing in companies that benefit the most from these price hikes. According to CLSA, ONGC could be the biggest gainer, with the stock offering up to 40% upside. Others like Indraprastha Gas, Mahanagar Gas and Gujarat Gas offer an upside of 12-15%. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/tcs-infosys-wipro-and-hcl-tech-share-price-can-jump-after-accentures-blockbuster-earnings/articleshow/86471274.cms">TCS, Infosys and Wipro take a lot of heart from Accenture's blockbuster earnings</a> <a href="https://www.businessinsider.in/thelife/news/meet-girish-mathrubootham-founder-and-ceo-of-freshworks/articleshow/86453777.cms">Girish Mathrubootham, the son of a retired bank officer who built a $13 billion company in just 10 years</a> <a href="https://www.businessinsider.in/stock-market/news/airtel-rights-issue-details-record-date-issue-price-and-more/articleshow/86446419.cms">Airtel rights issue worth ₹21,000 crore opens next month – record date, price, ratio and everything else you need to know</a>

Brace for higher LPG, petrol and diesel prices as crude oil prices rise to a 3-year high

New Delhi, Mar 31 () Natural gas prices on Tuesday were cut by a steep 26 per cent to its lowest rate since the pricing was made formula-driven in 2014, a move that is likely to translate into lower CNG and piped cooking gas prices but also make a huge dent in revenues of producers such as ONGC.Oil Ministry's Petroleum Planning and Analysis Cell (PPAC) said the bulk of India's existing gas production will be priced at USD 2.39 per million British thermal unit for the six-month period beginning April 1, down from USD 3.23 as of now.This will be the second reduction in six months to the lowest since 2014.The price of gas produced from difficult fields such as deepsea too has been cut to USD 5.61 from USD 8.43 per mmBtu now.Prices of natural gas, which is used to produce fertiliser and generate electricity and is also converted into CNG for use in automobiles as fuel and cooking gas for households, are set every six months -- on April 1 and October 1 each year. ANZ BAL

Natural gas prices cut by steep 26 pc; huge dent in ONGC revenues

New Delhi, Mar 2 () India's fuel demand is forecast to rebound to 3.8 per cent in the next fiscal starting April from its slowest pace in six years, according to oil ministry estimates.Petroleum product demand in 2020-21 is expected to total 222.79 million tonnes, up from 216 million tonnes estimate for the current fiscal, the ministry's Petroleum Planning and Analysis Cell (PPAC) said.Fuel consumption in the current fiscal ending March 31 will grow by just 1.3 per cent, its slowest pace in six years.Diesel, the most consumed fuel in the country, is estimated to see a 2.8 per cent growth in FY21 to 86.6 million tonnes as compared with just 0.9 per cent expansion in the current financial year. The growth in diesel demand in 2019-20 is the slowest in five years.Petrol demand is expected to slow to 8.4 per cent to 33.43 million tonnes, from 9 per cent. Cooking gas LPG demand is estimated to grow by 5 per cent to almost 28 million tonnes in FY21.The slowdown in fuel consumption in the current fiscal is reflective of economic growth dipping to an 11-year low of 5 per cent in 2019-20. ANZ BAL

India's fuel demand expected to rebound to 3.8% in FY21

New Delhi, Mar 19 () India's fuel demand has dropped by a steep 10-11 per cent in the first two weeks of March as the outbreak of coronavirus (Covid-19) led to the cancellation of flights and reduction in industrial activity. The country had consumed 19.5 million tonnes of petroleum products in March 2019, official data showed. Assuming consumption in two halves of the month was almost the same, as much as 10 million tonnes of fuel was consumed during the first fortnight of March 2019. "The petroleum industry is witnessing the impact of coronavirus on sales of all petroleum products. The overall demand for liquid fuels has gone down by 10-11 per cent in the first fortnight of March 2020," said Indian Oil Corp (IOC), the country's largest fuel retailer, in a statement. Restrictions and travel advisories, as well as a slowdown in industrial activity, has led to the fall in demand. While diesel sales as dropped by over 13 per cent, jet fuel sales has slumped by over 10 per cent. Petrol sales have seen a decline of over 2 per cent. "Due to restriction in movement and travel advisories, the aviation turbine fuel (ATF) sales have dropped by over 10 per cent. The bunker fuel sales are also down by approximately 10 per cent," IOC said. Crisil said the Covid-19 pandemic has made the already subdued demand outlook ever grimmer. "The airlines industry accounts for 6-8 per cent of total crude consumption. As more countries are implementing bans over Covid-19 in both international and domestic travel, the impact is likely to worsen. And if the pandemic is not contained over the next two-three months, the consequences will be severe," it said in a note. Covid-19, it said, is further drying up demand from the road transport and airlines segments in India as well. "Hence, consumption growth of petroleum products is expected to be low at 2-3 per cent in fiscal 2021," it said. Separately, Morgan Stanley cuts India's fuel demand estimate for the next financial year by five per cent. Prior to the outbreak of coronavirus, Oil Ministry's Petroleum Planning and Analysis Cell (PPAC) had projected fuel demand to grow to 222.79 million tonnes in the fiscal year starting April (2020-21) from an estimated 216 million tonnes in 2019-20. ATF consumption was projected to rise to 8.7 from an estimated 8.19 million tonnes in 2019-20 while diesel demand was to grow to 86.5 million tonnes from 84.26 million tonnes. Petrol consumption was projected to rise to 33.4 million tonnes from almost 31 million tonnes in the current fiscal. In the first 11 months of 2019-20, fuel demand was 197.6 million tonnes. ATF consumption came at 7.5 million tonnes in April 2019 to February 2020 while diesel demand was 77 million tonnes. Petrol consumption came at 27.8 million tones in April-February. ANZ ANSANS

India's fuel demand drops 11 pc in March as Covid-19 hits aviation, transport sectors

The current low oil prices have once again created ground for the <keyword id="26362" type="ORGANIZATION" weightage="20" keywordseo="Government">government</keyword> to further increase excise duty on petrol and diesel to meet additional expenditure needs arising from COVID-19 outbreak without hurting the consumers. <div type="Article" hostid="261" msid="75264311" title="Here’s why a crude oil crash won't reflect fast on your petrol and diesel bills" mstype="2" mssubtype="0"></div> Official sources said that the present global oil market could easily allow the government to increase excise duty on petrol and diesel by Rs 3-5 per <keyword id="88122" type="PERSON" weightage="20" keywordseo="Litre">litre</keyword> without impacting their pump prices. This could provide government with additional revenue between Rs 45,000-75,000 crore during 2020-21 at a time when expenditure is set to rise to revive economic activity in the country impacted by lockdown. No decision on raising excise duty on petrol and diesel has been taken as of now but the option is available and the current time is opportune to exercise it, sources quoted above said. Global crude oil prices are hovering between $20-25 a barrel now. In fact, on Monday US oil WTI fell 300 per cent to reach negative -$37 a barrel level for <keyword id="144660" type="PERSON" weightage="20" keywordseo="Futures-contract">futures contract</keyword> slated for May delivery. For India, the relevant Indian basket of crude has also averaged around $25 in April and touched $20 a barrel on April 17 as per Petroleum Planning and Analysis Cell (PPAC). This is $10 a barrel lower than March price of $35 a barrel when government decided to raise excise duty on petrol and diesel (on March 14) by Rs 3 each without effecting any increase in their retail prices. If we compare retail prices of petrol and diesel now with that of March 14 when government raised excise duty by Rs 3 per litre, things become clearer. On March 14, when crude prices were around $35 a barrel, even after factoring in the higher cost, petrol prices stood at Rs 69.87 a litre and diesel Rs 62.58 in Delhi. On Tuesday, retail price of petrol is almost at the same level at Rs 69.59 a litre and diesel at Rs 62.29 a litre in Delhi, when Indian basket of crude is hovering below $25 a barrel. "Even if state-run oil marketing companies retain the retail price of petrol and diesel at current levels, government could easily increase excise duty on two products by upto Rs 5 a litre. It seems that lower than likely fall in retail prices of petrol and diesel may have been kept keeping this mind," said an oil sector analyst not willing to be named. The government has already amended the law to raise excise duty on petrol and diesel by Rs 8 per litre each in future to up to Rs 18 per litre in case of petrol and up to Rs 12 per litre on diesel. This would be useful once it decided to further raise exercise duty on the two petroleum products. The current oil prices are expected to soften for some time. "<keyword id="8980484" type="UNKNOWN" weightage="20" keywordseo="Demand-destruction">Demand destruction</keyword> due to Covid-19 has created an unprecedented situation in the oil market with April demand itself down by 30 per cent from 2019 levels. Depressed prices will continue in the medium term till the economic recovery situation is clearer," <keyword id="837652" type="PERSON" weightage="20" keywordseo="Debasish-Mishra">Debasish Mishra</keyword>, partner at Deloitte India. <div type="Article" hostid="261" msid="75261597" title="Traders piled $1.6 billion into an oil ETF last week — right before prices went negative for the first time in history" mstype="2" mssubtype="0"></div><div type="Article" hostid="261" msid="75264639" title="Crude oil prices didn’t fall below zero, futures did – and here’s what it means" mstype="2" mssubtype="0"></div>

Crude in favourable zone for another excise hike on fuel

New Delhi, Oil sector public sector undertakings (PSUs) may have to bear a <keyword id="9705803" type="UNKNOWN" weightage="20" keywordseo="larger-share">larger share</keyword> of <keyword id="10488841" type="UNKNOWN" weightage="20" keywordseo="additional-dividend-payment">additional dividend payment</keyword> to the government this year with almost all companies falling behind on their capex plan for the current fiscal. As of November, the capex of PSU oil companies put together stands at ₹46,303 crore, less than 50% of the annual target of ₹98,522 crore. The government has asked companies to complete at least 75% of capex till the end of December quarter. But this looks highly unlikely now pushing the case for higher dividend payout. In meetings with PSUs, Finance Minister Nirmala Sitharaman had stressed on the need for PSUs to step up <keyword id="6355120" type="UNKNOWN" weightage="20" keywordseo="investment">investment</keyword> during the time of the pandemic to boost overall sentiments and kickstart investment climate in the country. She had specifically urged companies to complete at least 75% of capex target by December-end and more than 100% by March. "It is a double whammy for PSUs now. They have to cough up more either through investments or through payment of additional dividends. It should also be seen that the companies are finding it difficult to meet capex targets given financial and project implementation constraints. Covid has severely dented demand and slowed project implementation. Consequently, there is already a strain on their resources that would get heightened as additional dividend would have to be paid," said a top official of a PSU, asking not to be named. While almost all PSUs are facing delays and difficulties in stepping up the gas and increasing investments, the situation among companies in the oil and gas sector looks worse. Slow demand conditions in early part of the year resulted in slowing of several capex plans. Though the situation has improved from November onwards, still its a long way to go for normalcy to return in the sector. For the government, oil sector PSUs are also set to make big inventory gains due to firming up of crude prices, and hence they are being looked at for higher interim dividend or special dividend and a few may also be considered for share buyback depending on market conditions. Among the oil and gas PSUs, the worse performer in terms of capex spend is the country's largest oil and gas explorer ONGC and largest public sector refiner <keyword id="6356834" type="DOMAIN" weightage="20" keywordseo="indian-oil-corporation">Indian Oil Corporation</keyword>. According to oil ministry's <keyword id="819806" type="COMPANY" weightage="20" keywordseo="Petroleum-Planning-and-Analysis">Petroleum Planning and Analysis</keyword> Cell (PPAC), while ONGC had completed just ₹14,959 crore worth of capex upto November out of FY21 investment target of ₹32,502 crore, IOC's capex upto November is ₹12,104 crore against annual target of ₹26,233 crore. Similarly, HPCL has completed capex of ₹5,658 crore (upto November) against target of ₹11,500 crore; Gail India - ₹2,614 crore against annual target of ₹5,412 crore; Oil India - ₹2,136 crore vs ₹3,877 crore target; MRPL - ₹631 crore vs ₹1,150 crore, OVL - ₹3,765 crore vs ₹7,235 crore. Among the worst performer on capex is privatisation-bound <keyword id="155363" type="DOMAIN" weightage="20" keywordseo="Bharat-Petroleum-Corporation-Ltd">Bharat Petroleum Corporation Ltd</keyword> (BPCL) which has spent just ₹3,716 crore against target of ₹9,000 crore. Officials sources said that PSUs with stock prices higher than the book value and who have sufficient cash funds may also be asked to shell higher dividend in FY21. A call will be taken after the third quarter results of companies are declared late January or early February next year. With the central government being the largest shareholders in PSUs, higher dividend would largely help it to fill its coffers at a time when revenue is constrained due to a overall fall in economic activity during the pandemic while expenditure has risen sharply. Dividend from non-financial PSUs have been budgeted at ₹65,747 crore in FY21. Any increase in this will give a boost to non-tax revenue of the government and help its bridge the rising fiscal deficit that as per initial estimate is now pegged close to 8% of GDP. Finance Minister Nirmala Sitharaman and her predecessors, including the late Arun Jaitley and P. Chidambaram, had maintained the policy of advising non-financial state-owned companies that if they are not utilising their cash reserves for capex needs, they should give it to the Centre through dividends or share buybacks. As per the guidelines issued by disinvestment department DIPAM, every CPSE is required to pay a minimum annual dividend of 30% of PAT or 5% of the net-worth, whichever is higher. Apart from oil sector, several PSUs in power and mining space have completed just about 40% annual capex by November due to constrained business environment. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-mrs-bectors-ril-bharti-airtel-vodafone-idea-ilfs-interglobe-aviation-future-group-deepak-nitrite-jubilant-foodworks-and-others/articleshow/79933826.cms">Top stocks to watch – Mrs Bectors, RIL, Bharti Airtel, Vodafone Idea, IL&amp;FS, InterGlobe Aviation, Future Group, Deepak Nitrite, Jubilant FoodWorks, and others</a> <a href="https://www.businessinsider.in/thelife/personalities/news/from-taking-on-yahoo-to-being-tamed-by-chinas-communist-party-its-been-a-roller-coaster-decade-for-jack-ma/slidelist/79935613.cms">From taking on Yahoo to being tamed by China’s Communist Party— it’s been a roller coaster decade for Jack Ma</a> <a href="https://www.businessinsider.in/careers/news/ey-is-looking-to-hire-9000-techies-in-2021-to-boost-its-digital-services/articleshow/79936576.cms">EY is looking to hire 9,000 techies in 2021 to boost its digital services</a>

Revenue constrained government may push oil PSUs short on FY21 capex to pay higher dividend

It’s 47 degree Celsius and you have been keeping the AC on to have a good night’s sleep. Nightmare is on its way. If the summer has made you exhausted, power bills will exhaust your pockets soon. As per a news report in The Economic Times, electricity bills are expected to shoot up by 5%-20% from June as the <keyword id="750744" type="ORGANIZATION" weightage="20" keywordseo="Apellate-Tribunal-of-Electricity">Apellate Tribunal of Electricity</keyword> (APTEL) has pulled up <keyword id="6379315" type="ORGANIZATION" weightage="20" keywordseo="Delhi-Electricity-Regulatory-Commission">Delhi Electricity Regulatory Commission</keyword> (<keyword id="6377890" type="ORGANIZATION" weightage="20" keywordseo="DERC">DERC</keyword>) over failure to pass on power purchase adjustment charges (PPAC). 
 DERC has also received an order from APTEL to pass on the charges for two quarters (from October 2014 to March 2015) within three weeks. A copy of the order has been sent to DERC <keyword id="5504" type="POSITION" weightage="20" keywordseo="Chairperson">chairperson</keyword> PD Sudhakar. The controversial PPAC order for the first quarter of 2015-16 will be heard in July. 
 Sources informed the ET that the petition to APTEL was filed by <keyword id="45008" type="CITY" weightage="20" keywordseo="Tata-Power">Tata Power</keyword> Delhi in March and pleadings were completed by April. Later, the BSES discoms supported the petition citing worsening financial problems with the withdrawal of PPAC. 
 
The discoms stated that they were getting PPAC for three quarters (July 1, 2014 to March 31, 2015) despite submitting petitions to DERC regularly. The charges of July 1 to September 30, 2014 were the first ones denied to discoms. DERC had on November 13, 2014 allowed the charges to discoms, but a day later this order was withdrawn after citing non-furnishing of complete details of the fuel bills of generators. 
Discoms claimed they moved APTEL as DERC was mum on the issue. "DERC, in its reply to the interim application by discoms, cited difficulties such as frequent revision of tariffs and adverse public interest for not releasing PPAC. It added that tariff determination for the current year, which will be completed shortly, can accommodate this PPAC so the application should not be allowed," discom sources have informed the financial daily. 
 
The power distribution companies, however, cited financial crunch and argued that in 2011 the tribunal had passed clear directions that PPAC was to be provided monthly or maximum on quarterly basis. 
 What Delhi’s CM would be doing is the obvious question. The <keyword id="1462125" type="UNKNOWN" weightage="20" keywordseo="Aam-Admi-Party">Aam Admi Party</keyword> has reduced power tariff after coming to power. 
 
(Image: Reuters)

You Searched For "PPAC" and got 11 results

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You Searched For "PPAC" and got 11 results

Government doubles gas prices; CNG rates might go up

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Govt approves 20% premium for gas from new wells for ONGC

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Revenue constrained government may push oil PSUs short on FY21 capex to pay higher dividend

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​Done in by the heat wave? Now get ready to bear the higher power tariffs as well!

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Good news: Price of cooking gas to come down

Done in by the heat wave? Now get ready to bear the higher power tariffs as well!