New Delhi: Oil minister Murli Deora today demanded abolition of customs duty on crude oil and cut in excise duty on diesel to avoid more fuel price hikes that have become necessary because of spiralling global oil rates, reports PTI.
“We are demanding rollback of the 5% customs duty that finance minister Pranab Mukherjee had imposed on crude oil in his last budget. Also, the Re1 per litre increase in excise duty on petrol and diesel (also done in budget for 2010-11) needs to be reversed,” Mr Deora told reporters here.
Mr Mukherjee had on 26 February 2010, imposed a 5% import duty on crude oil and hiked the same on petrol and diesel from 2.5% to 7.5%. He also hiked excise duty on petrol and diesel by Re1 a litre to Rs14.35 and Rs4.60 per litre, respectively.
The twin move had led to a Rs2.71 a litre hike in petrol price and Rs2.55 per litre increase in diesel rates then.
“Crude oil prices have touched $92 per barrel and there are some forecasts that it will go to $100 a barrel soon. There is definitely a case for rolling back the duties finance minister had imposed in his last budget,” Mr Deora said.
Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation are losing Rs1.22 per litre on petrol sales despite last week’s Rs2.50-Rs2.54 a litre price hike, he said adding that on diesel the companies are losing nearly Rs7 per litre.
The three firms are losing about Rs290 crore a day in revenues on selling diesel, LPG and kerosene below cost.
Besides petrol and diesel, they are losing Rs19.60 a litre on kerosene and Rs366.28 per 14.2-kg cylinder.
The three firms are projected to lose Rs73,600 crore in revenues during the 2010-11 financial year, 55% of which Mr Deora wants the finance ministry to meet by way of cash from the central budget.
Mr Deora said he had on 8th January met Mr Mukherjee to seek immediate release of Rs10,000 crore in interim compensation to state oil companies.
So far, the finance ministry has committed to make up only one-third of the revenue losses from the budget.
“The Finance Minister has sanctioned Rs13,000 crore to cover part of under-recoveries in first half of the current fiscal. I requested him to release another Rs10,000 crore for third quarter under-recoveries immediately for Q3,” he said.
Without government subsidy, HPCL and BPCL are sure to report net loss in the October-December quarter and IOC, too, may end the three months in red.
The government had in 2008-09 given Rs71,292 crore, out of the Rs103,292 crore total revenue loss on fuel sales.
“This was 69% of the total under-recovery. During the current fiscal, which has also seen hardening of crude prices, we are seeking just 55%," Mr Deora said.
United Nations: Developing and transition economies, for the first time, absorbed more than half of global foreign direct investment (FDI) flows of about $1,122 billion in 2010, reports PTI quoting a UN body report.
While FDI has picked up in countries like Singapore, Hong Kong (China), China, Indonesia, Malaysia and Vietnam, there has been a 14% drop in overseas investment in South Asia due to decline in India’s inflows, the report by the UN Conference on Trade and Development (UNCTAD) said.
Global inflows of FDI rose marginally by 1%, from $1,114 billion in 2009 to almost $1,122 billion in 2010, based on UNCTAD estimates, which also revealed that FDI flows to developing economies rose by some 10% to $525 billion in 2010, due to a relatively fast economic recovery and increasing South-South flows.
“While FDI inflows to developed countries contracted further in 2010, those to developing and transition economies recovered, surpassing the 50% mark of global FDI flows,” said the issue of UNCTAD’s Global Investment Trends Monitor.
“The improvement of economic conditions in 2010 drove up reinvested earnings, while equity capital and intra-company loans remained relatively subdued,” it added, noting that the cross-border mergers and acquisitions volume rebounded.
India, however, registered a 31.5% decline in FDI at $23.7 billion in 2010 from $34.6 billion in 2009.
Cross border mergers and acquisitions (M&As) also dipped by 14.3% to $5.2 billion in 2010 from $6 billion in the previous year.
China registered 6.3% increase in FDI inflows (in the non-financial sector) to $101 billion, but M&As declined by 44.6%.
The report said that FDI flows to South, East and South-East Asia have outperformed other developing regions.
“After a 17% decline in 2009, inflows to the region rose by about 18% in 2010, reaching $275 billion,” the report said, noting that the growth was due to “booming inflows” in Singapore, Hong Kong (China), China, Indonesia, Malaysia and Vietnam.
A strong rebound in FDI flows to developing Asia and Latin America offset a further decline in inflows to developed countries, according to the UN body.
For 2011, UNCTAD estimates FDI flows to be between $1.3 trillion and $1.5 trillion. Worldwide M&A activity (domestic and cross-border M&As combined) is also expected to rise further this year.
“A strong global FDI recovery depends much on the steady economic and FDI recovery of the developed economies,” it said.
Dubai: Plans to set up an income tax office in the UAE are in the pipeline, reports PTI quoting India’s ambassador to the UAE, MK Lokesh.
Mr Lokesh confirmed to PTI that further to a decision taken by the government of India, efforts are being made in this direction and such a centre's scope and functions are being determined.
“It is still at a preliminary stage and might take some time. However, the suggestion did not go from the embassy but was taken in New Delhi,” he said.
Reports in the local media earlier said that New Delhi wants to set up an Income Tax office in Abu Dhabi to keep an eye on investments made by wealthy Indians in the UAE, which is among seven countries chosen for the project.
According to reports, similar offices will operate in the US, the UK, Germany, France, the Netherlands, Japan and Cyprus, while two already exist in Mauritius and Singapore.
The ambassador said that once the proposal materialises, several approvals will have to be taken including those of the local authorities.
Mr Lokesh also said that such proposals are unrelated to recent debates in India regarding the taxation of expatriates.
He pointed out that a taxation agreement between the two countries already exists.