Category: India

ByAnant Vijay Kala India’s decision to end government control of diesel fuel prices will save the government billions of dollars which can be better spent on more pressing needs such as building schools, roads and ports, analysts say. India announced over the weekend that it would end a decades-old policy of controlling the retail price of diesel fuel. Providing diesel at below-market rates cost the government about $10 billion last year, hampering India’s ability to spend on other things. The government had given up control over the prices of gasoline back in 2010 but had continued to regulate prices of diesel – the primary fuel used in trucks and tractors as well as for running generators used to power irrigation pumps. “It shields the government’s finances from volatility in global oil prices, because of which the subsidy bill often went up,” said Radhika Rao, an economist at DBS Bank. […]

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A 22 percent slump in oil prices this year and the end of state polls are emboldening India’s Prime Minister Narendra Modi to press ahead with politically risky decisions to lure investors and revive the economy. His government freed diesel prices of state control for the first time in over a decade and raised tariffs on natural gas over the weekend in the biggest steps to curb subsidies and spur output. The changes build on Modi’s pledge to revitalize Asia’s third-largest economy as his party made gains in two provincial elections that may help bolster his power. Modi, who has made energy security his priority, is lifting restrictions that contributed to a decline in natural gas output every month since the mid-2010, while deterring Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) from bidding for oil and gas blocks. The restraints on diesel have also idled fuel pumps operated […]

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India said on Saturday that it has lifted state control on diesel prices, in a long-awaited move that economists say will help encourage investment in the country’s struggling fuel industry Continue Reading

Print Back to story OPEC must keep cutting prices to displace competing supplies from Latin America and West Africa, Indian refiners said. Saudi Arabia, Iran and Iraq , which account for about half the output from the Organization of Petroleum Exporting Countries, will sell crude to Asia next month at the biggest discounts since at least January 2009. Hindustan Petroleum Corp. and Mangalore Refinery & Petrochemicals Ltd. say it’s not enough to undercut the alternatives. The highest U.S. output in almost 30 years is reducing America’s demand for oil and giving consumers in Asia a greater choice of suppliers, from Venezuela to Alaska and Nigeria. The glut has driven futures into a bear market and prompted OPEC members to cut prices to defend their market share. “Obviously the Middle-East producers want to retain market leadership in Asia,” said B.K. Namdeo, refineries director at Hindustan Petroleum, India ’s third-biggest state […]

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Print Back to story There hasn’t been a better time for Prime Minister Narendra Modi to deregulate diesel prices. Oil prices are near a four-year low and two major state elections are out of the way. Reserve Bank of India Governor Raghuram Rajan has called on Modi to “seize this moment” while inflation is the lowest in three years and refiners are selling at a profit for the first time in recent memory. “There’s absolutely no reason for the government not to deregulate — it’s probably the easiest thing they can do, a low-hanging fruit,” Upasna Bhardwaj, an economist at ING Vysya Bank Ltd., a unit of the biggest Dutch financial-services company, said by phone from Mumbai. “The markets have been awaiting reforms, and there has been nothing big, so if they fail to do this it will be treated very negatively.” Steps to dismantle India’s subsidies would build […]

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In a blow to American hopes of reaching an international deal to fight global warming, India’s new environment minister said Wednesday that his country would not offer a plan to cut its greenhouse gas emissions ahead of a climate summit next year in Paris. The minister, Prakash Javadekar, said in an interview that his government’s first priority was to alleviate poverty and improve the nation’s economy, which he said would necessarily involve an increase in emissions through new coal-powered electricity and transportation. He placed responsibility for what scientists call a coming climate crisis on the United States, the world’s largest historic greenhouse gas polluter, and dismissed the idea that India would make cuts to carbon emissions. “What cuts?” Mr. Javadekar said. “That’s for more developed countries. The moral principle of historic responsibility cannot be washed away.” Mr. Javadekar was referring to an argument frequently made by developing economies — […]

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NEW DELHI—India’s power minister said Sunday that the country isn’t on the verge of an electricity crisis even though many of its power plants are running low on coal.  Piyush Goyal —who concurrently heads the ministries for power, coal and renewable energy—told reporters Sunday that power plants are facing coal shortages because they are producing more electricity to make up for shortfalls in the yearly monsoon rains, which have crimped generation by hydroelectric power plants.  Generation by coal-powered stations between June and August was around 21% higher than in the same period last year, Mr. Goyal said. But domestic coal production and imports haven’t kept up , which has forced plants to use up their inventories. "You will appreciate that when you produce 20% more power whereas your supply has gone up by only 5% or 6%, the stocks are bound to fall," he said.  He said that stronger rains […]

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Indian Prime Minister Narendra Modi is closer to scrapping controls on diesel prices that led to $66 billion of losses on sales of the fuel in the past decade. The loss has fallen to 0.08 rupees (less than 1 U.S. cent) a liter from 13.4 rupees in September last year after Modi continued with gradual price increases that began in January 2013, Oil Ministry data show. The ministry will seek Cabinet approval to remove diesel controls once losses end, one of its officials with direct knowledge of the matter said last week, while requesting anonymity citing rules. Modi is vying with counterparts including Indonesian President-elect Joko Widodo to woo investors by curbing petroleum subsidies, which frees up funds to invest in infrastructure for faster growth. The government and state-run crude producer Oil & Natural Gas Corp. (ONGC) bore the brunt of the 4 trillion-rupee cost of cushioning diesel in […]

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Day laborers load coal onto a truck at the Goladi coal depot, operated by Coal India Ltd. subsidiary Bharat Coking Coal Ltd. (BCCL), in Jharia, Jharkhand, India, on Saturday, April 5, 2014. Coal India, the world’s largest producer, estimates on its website that the nation faces a supply deficit of 350 million tons by 2016-2017, thereby overtaking import demand from China, the world’s biggest coal consumer and producer. Photographer: Sanjit Das/Bloomberg “Coal is king and paramount lord of industry,” wrote India’s Supreme Court this week. Few in the country’s fuel-starved industrial economy would disagree – hence the dismay that followed when the court ruled as illegal every coal licence given to private sector companies for the past two decades. Since 2012, the threat of sanction has hung over many prominent businesses in sectors such as power and steelmaking, which had been handed exclusive use of so-called “captive” coal mines […]

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