New Delhi: The oil ministry today said the "delay" in deciding on Vedanta Resources' $9.6 billion acquisition of Cairn India will not have any impact on the 9th round of auction of oil and gas areas under the New Exploration Licencing Policy (NELP), reports PTI.
"The ministry has said that we have no position (on the deal). We are neither for nor against the deal," said ministry of petroleum and natural gas joint secretary (international cooperation) Vivek Kumar at a CII roundtable on Overseas Energy Acquisitions.
UK-based Cairn Energy had on 16th August announced the sale of a 40% to 51% stake in its India unit to London-based mining group Vedanta and had expected to close the transaction by December-end.
The delays, Mr Kumar said, were on Cairn's end, as it did not submit the requisite applications seeking the government's nod for transfer of ownership in its 10 properties, including the prime Rajasthan oilfields.
"The government will decide (the case) by February-end or March after considering all aspects," he said, adding that the issue involved inter-ministerial and inter-disciplinary consultations, including with the law ministry and the Securities and Exchange Board of India (SEBI).
He said the deal will not impact the auction of 34 exploration blocks in the ninth licensing round. "Vedanta deal is not going to have an impact on NELP-IX... We are aware of all aspects (involved in the deal) and a decision will be taken on merit."
Cairn Energy CEO Bill Gammell had on 11th October stated that the delay in government approvals for the Vedanta deal may hurt future foreign investment in India.
"If it (the deal) is delayed, it won't help India's cause," Mr Gammell said even before Cairn fulfilled the prerequisite of making formal applications for government approval. It only made the formal applications on 23rd November.
Mr Kumar today rejected claims that the delay was on the oil ministry's part, saying Cairn did not submit proper applications for a long time.
"We are aware of all aspects, including the right of an investor to have exit option," he said, referring to the freedom to any firm investing in oil and gas sector to sell its holding and exit.
However, in the case of the Cairn-Vedanta deal, technical, financial and legal aspects need to be considered to take a "comprehensive view," he said.
The government is closely vetting the transaction as a non-oil company is buying controlling stake in Cairn India, the owner of the nation's largest onland oil discovery. The government needs to satisfy itself that the new owner can satisfactory operate the fields and that the deal will not hurt the interests of state-owned ONGC, which is a partner in several blocks owned by Cairn India.
Lakhimpur: Minister of state for petroleum and natural gas Jitin Prasada has said state-run oil companies have the freedom to fix petrol prices, but the government will step in if rates shoot up "indiscriminately", reports PTI.
"Petrol prices had been exempted from government control and oil companies are empowered to decide the same," Prasada said on Tuesday on the sidelines of a health camp jointly organised by Steel Authority of India Limited and Petronet LNG Ltd at Mohammadi, in Kheri district of Uttar Pradesh.
"However, the government would intervene and take adequate steps if the prices shoot up indiscriminately," he said.
Speaking at the function, the minister said the Centre intends to set up 'Sanjha Chula' (common kitchen) at every government hospital and medical college in Uttar Pradesh so that the attendants of patients can cook meals.
"However, this can be done only when the state government and the respective district administrations come forward. Till now, the 'Sanjha Chula' scheme is only available in a medical college in Lucknow," he said.
Mumbai: Indicating that more policy tightening measures will have to be undertaken, Reserve Bank deputy governor Subir Gokarn today said headline inflation is not easing as fast as the apex bank would like it to do and that upside risks still remain high, reports PTI.
"Inflation is not easing as we would like it to be...
Upside risks to inflation are still high," Mr Gokarn told newsmen on the sidelines of a seminar on debt markets organised by the credit rating agency Care here today.
However, he said, the current skyrocketing prices of onions will only have a temporary impact on inflation. "I don't think high onion prices will have a long-term impact on inflationary pressures, as the government has said that it has been doing everything to manage supply side issues. Also, high food price inflation was driven more by persistent rise in nutritional food items like cereals," he said.
Mr Gokarn further pointed out that the rising commodity prices in the global markets also point to the rising risk of headline inflation.
The Reserve Bank of India (RBI) had left interest rates unchanged last Thursday at its mid-quarter review but warned that inflation was still well above its comfort level and unveiled steps to address the persistently tight liquidity by permanently bringing down the statutory liquidity ratio-a prudential measure that requires banks to invest a portion of their funds into government bonds, gold and other illiquid assets-by 100 basis points to 24%, which would release Rs48,000 crore into the system.
Due to the persistently high inflation numbers, the RBI has revised upwards its annual inflation numbers to 6.5% by end March, which is one full percentage point above its earlier projection.
Headline inflation eased in line with expectations to 7.48% in November, its lowest level in a year. The finance ministry is expecting further decline in headline inflation numbers.
However, food inflation, which has been on the rise for the past three weeks, is likely to go up in the weeks ahead on account of sky-high higher onion and other certain other vegetables. For the week ended 4th December food inflation rose to 9.46% as vegetables turned expensive. The previous week it was 8.69%. Against this, in the corresponding week last year, food inflation was ruling at 20.90%.
Rising crude prices as well as the commodities are likely to have their cascading impact on inflation back home.
Also, last week oil marketing companies had upped the retail price of petrol by Rs2.95 a litre and the Empowered Group of Ministers is meeting end of the month to review subsidy on diesel and cooking gas. While petrol price hike will not have any serious adverse impact on headline inflation, any spike in diesel will have a serious implication on it.