The decisions on diesel rate increase for retail and bulk consumers will cut subsidies by about Rs15,000 crore on an annualised basis and by Rs3,400 crore in remainder of FY’13
New Delhi: In bold reforms, the government Thursday moved towards deregulating diesel when it raised prices by 50 paise per litre and planned similar monthly hikes in future to cut record subsidies, reports PTI.
This was coupled with a decision to charge bulk consumers like defence, railways and state transport undertakings market price which is almost Rs10 a litre more than retail selling rate, to save an estimated Rs12,907 crore in annual subsidy.
As a sweetener to the bitter pill, the Cabinet Committee on Political Affairs chaired by prime minister Manmohan Singh bowed to public pressure to raise the cap on subsidised LPG to nine cylinders per household from six.
State-owned oil companies in a parallel cut petrol price by 25 paise a litre in view of softening in global oil rates.
The decisions on diesel rate increase for retail and bulk consumers will cut subsidies by about Rs15,000 crore on an annualised basis and by Rs3,400 crore in remainder of FY’13.
While the base hike in diesel price was 45 paise, it will lead to an increase of 50 paise in Delhi after including local VAT. New rate of Rs47.65 a litre will be effective from midnight 17th January.
Similarly, while the base rate cut on petrol was 25 paise, it will translate into a reduction of 30 paise in price in Delhi to Rs67.26 a litre with effect from midnight 17th January.
While subsidised LPG rates haven’t been increased, non-subsidised cooking gas which consumers will buy beyond their new entitlement of nine cylinders will cost Rs46.50 more at Rs942 per 14.2-kg cylinder.
Bulk users, which consumer around 17.77% of the total diesel sales in the country, will pay Rs56.88 a litre in Delhi. These rates would be revised on 1st and 16th of every month based on previous fortnight average oil cost. The same is the methodology followed for pricing of jet fuel (ATF).
Prices vary from city to city due to differential local sales tax or VAT rates.
The hike in diesel price will help neutralise the Rs10,000 crore hike in bill to subsidise domestic cooking gas (LPG) whose rates along with kerosene have been untouched.
Oil ministry M Veerappa Moily said the decision to allow oil companies to make “small changes” in diesel rates from time to time was necessitated as oil companies, which import about 80% of their oil needs, faced closure in absence of being able to recover even cost.
Oil company borrowings hit Rs200,000 crore. Diesel accounts for 59% of the estimated Rs161,000 crore fuel subsidy bill in 2012-13.
“We have given some liberty to oil marketing companies to raise diesel prices in small dozes. They are authorised to make small price correction from time to time,” Moily said.
“They should exercise this discretion in such a manner that inflation is not impacted. Also, the entire burden is not put on consumers,” he said. “The decisions (on price increase) will be balanced and with a human face.”
Asked what small meant, he said “small means small.”
Finance minister P Chidambaram maintained that the oil companies have been allowed to make “small correction from time to time.”
“I am not factoring in at this moment (the price rise). I am proceeding on the basis that the subsidy bill remains the same (as earlier),” he said.
Opposition parties and allies like Samajwadi Party slammed the government’s decision on diesel calling it deregulation. Demanding a rollback, they said the decision to allow periodic hike in diesel prices would have an all-round spiralling effect on commodity prices and transportation cost.
They were not impressed by the decision to raise the cap on LPG cylinder calling it is a political gimmick.
The price cut in petrol, which was deregulated in June 2010, is the first revision since November and was announced by oil companies independent of the government decision.
Previously, petrol price was cut twice in October and November—first by 56 paise and then by 95 paise per litre.
Price of diesel was last revised on 14th September when it was hiked by a steep Rs5.63 per litre. Kerosene rates have not changed since June 2011 and it currently costs Rs14.79 per litre in Delhi.
Subsidised LPG costs Rs410.50 per 14.2-kg cylinder and any household requirement beyond the new cap of nine cylinders will have to be bought at Rs942 per bottle.
As per the 13th September decision of the CCPA, which had originally capped subsidised LPG supply at six cylinders per household in a year, the non-subsidised LPG was to be market priced.
Oil secretary GC Chaturvedi said after yesterday’s decision, consumers will get five subsidised cylinders instead of previously mandated three in the period to 31 March 2013. From 1 April 2013 they will get nine cylinders in a year.
Moily said the decisions at CCPA were based on recommendations of the Vijay Kelkar Committee, which was appointed by the Finance Ministry to suggest a roadmap for fiscal consolidation.
The panel had recommended an immediate hike in price of diesel by Rs4 per litre, of kerosene by Rs2 a litre and of LPG by Rs50 per cylinder. Thereafter, it suggested raising rates on a monthly basis till revenue losses are wiped off.
Officials and ministers refused to call the CCPA’s decision as deregulation but experts felt that this could be the beginning of such a course.
Moily said the decision to decontrol diesel was taken in June 2010 but was not implemented. “We have now given the liberty to oil marketing companies to go for small increases.
We have taken the first and decisive step. When it is to be totally deregulated, has been left to the oil marketing companies,” he said when asked whether today’s decision would amount to complete deregulation or partial deregulation.
Finance minister P Chidambaram refused to enter into a discussion on the issue.
The government had in June 2010 deregulated petrol pricing and had in-principal decided to decontrol diesel.
Though decontrolled, petrol rates have rarely moved in tandem with cost and state-owned oil companies have often acted on political counsel in deciding on rates.
The decision on diesel was never implemented.
Before yesterday’s decision, state-owned oil companies sold diesel at a loss of Rs9.60 per litre, kerosene at Rs32.17 a litre and LPG at Rs490.50 per 14.2-kg cylinder.
Wipro expects its revenues from IT services business to be in the range of $1.585 billion to $1.625 billion for the quarter ended 31 March 2013
Mumbai: Wipro, the country’s third largest software services firm, today reported 18% rise in its consolidated net profit to Rs1,716.4 crore for the third quarter ended 31 December 2012, reports PTI.
The Bangalore-based company had posted a net profit of Rs1,456.4 crore in the year-ago period, it said in a filing to the BSE.
Consolidated total income of the IT major was up by 10% to Rs10,989.1 crore for the October-December quarter of the current fiscal against Rs9,965.1 crore in the same period of 2011-12 fiscal.
IT services revenue, which accounted for 78% of its revenues, stood at $1.577 billion in the reporting quarter, up 4.8% year-on-year and 2.4% cent compared to July-September 2012 quarter. In rupee terms, it stood at Rs8,602 crore.
“In constant currency, IT services revenue in dollar terms was $1.571 billion, within our guidance range of $1.560 billion to $1.590 billion,” Wipro said in a statement.
“While the overall mood on economic growth continues to be muted, global corporations continue to leverage technology to drive revenues and productivity,” Wipro chairman Azim Premji said.
Wipro expects its revenues from IT services business to be in the range of $1.585 billion to $1.625 billion for the quarter ended 31 March 2013.
“We have seen broad based growth in the quarter with all our verticals growing sequentially. Our improvement in customer and employee engagement is reflected in client mining with 10 customers contributing more than $100 million and lower attrition.
“We continue to make investments in our go to market organisation and technology themes to be a strategic partner to our customers,” Wipro IT Business executive director and CEO TK Kurien said.
The IT services segment had 1,42,905 employees as of 31 December 2012, an increase of 2,336 people in the quarter. It added 50 new customers in the reporting quarter.
“We have expanded operating margins sequentially through improvements in revenue productivity and improved cash flow generation through efficient working capital management,” Wipro’s executive director and CFO Suresh Senapaty said.
Its IT products segment recorded revenue of Rs997 crore for the quarter, a year-on-year increase of 11%, while consumer care and lighting business segment recorded revenue of Rs1,028 crore, a growth of 17% year-on-year.
Both businesses contribute about 9% of its total revenue.
In November last year, the company had announced the demerger of its non-IT businesses like Consumer Care & Lighting into a new company to focus exclusively on information technology.
Hero MotoCorp managing director & chief executive officer Pawan Munjal said: “The last two quarters have been challenging for the Indian auto industry on account of the delayed monsoons, rising fuel prices and subdued sentiments”
New Delhi: Hero MotoCorp, the country’s largest two-wheeler maker, today reported 20.41% decline in net profit at Rs487.98 crore for the third quarter ended 31st December, due to lower sales and higher expenses, reports PTI.
The company had posted net profit of Rs613.03 crore in the same quarter of the 2011-12 fiscal.
Net sales in the October-December quarter, 2012-13 stood at Rs6,151.31 crore, as against Rs5,983.55 crore in the year-ago period.
Volume sales during the quarter were down to 15,73,135 units, as against 15,89,286 units in the year-ago period.
During the third quarter, the company’s “other expenses” stood at Rs625.33 crore, as against Rs498.68 crore in the corresponding period last fiscal.
Hero MotoCorp managing director & chief executive officer Pawan Munjal said: “The last two quarters have been challenging for the Indian auto industry on account of the delayed monsoons, rising fuel prices and subdued sentiments.”
He, however, said the company had good growth during the festive season selling over 1.1 million two-wheelers in the months of October and November.
“...Our despatches were consistently over five-lakh every month of this quarter. This trend may be an early sign of recovery and we hope the domestic two-wheeler industry will revert to higher growth rates in near future. Whenever that happens, we will be geared-up to meet the upsurge in demand,” Munjal said.
The Hero MotoCorp stock ended the day down 0.92% from the previous close on the BSE at Rs1,818.5 per share.