The carriers which have recently received permission from the Directorate General of Foreign Trade to import jet fuel are Kingfisher Airlines, SpiceJet and IndiGo
New Delhi: Three Indian carriers, which have been permitted to directly buy jet fuel from foreign sources, would together import almost 13 lakh kilo litres (kl) of the fuel at a cost of about Rs5,780 crore for the present, reports PTI.
The carriers which have recently received permission from the Directorate General of Foreign Trade (DGFT) under the commerce ministry, to import aviation turbine fuel (ATF) are Kingfisher Airlines, SpiceJet and IndiGo.
Air India, which has also applied for such an approval, is yet to receive permission to import ATF. The move will help the airlines to significantly slash its operating costs.
“All the three airlines have been permitted to directly import ATF,” a senior commerce ministry official told PTI.
While InterGlobe, owner of no-frill airline IndiGo, got approval to import 7.15 lakh kl worth Rs3,200 crore of jet fuel, cash-strapped Kingfisher has been allowed to buy 5 lakh kl worth Rs2,233 crore. SpiceJet would import only 50,000 kl worth Rs235 crore, the official said.
The three carriers have been negotiating with leading oil marketing companies and were hopeful of beginning fuel imports in due course, a source said.
Industry experts have claimed that a mix of taxes levied by state-run oil marketing companies and the state governments make jet fuel prices in India among the highest in the world. Currently, fuel costs account for about 40% of an airline's total operating costs. SpiceJet's chief executive Neil Mills had recently said the airline industry would benefit from direct ATF imports due to high ATF prices in India.
“Aircraft fuel expenses were 90% higher than the same period last year and fuel cost as a proportion constituted 50% of the total revenue in October- December, 2011 quarter as compared to 37% in the comparable quarter for the fiscal 2011,” SpiceJet had said in its Q3 financial statement.
The cash-strapped Kingfisher Airlines, which was burdened by a debt of over Rs7,000 crore, had earlier strongly pitched for permission to allow foreign airlines to invest in domestic carriers.
India’s civil aviation sector grew at an average of over 18% in the last seven years and the government has taken various steps to resolve the woes faced by airline industry, including allowing them to directly import jet fuel.
“Among the reforms that will happen, I hope, is subsidy reform. The finance minister talked about this in his budget. We will try to use the UID system that we are developing to cut down leakage in subsidy,” chief economic advisor, Kaushik Basu told reporters
Washington: After the furore over his remarks to a think tank here, chief economic advisor, Kaushik Basu, feels India will see “some important” reforms in the next six months, including on subsidies and may be partial diesel decontrol and FDI in retail, reports PTI.
However, he feels the “biggest reform” GST (Goods and Services Tax) may be tougher because it is good and not everybody wants it to happen under the present regime.
Mr Basu, whose remarks on Wednesday that no big ticket reform is possible till 2014 elections raised a political flutter back home, said there is a serious risk of another European crisis in 2014 and appropriate measures need to be taken to avert another global economic crisis.
“Among the reforms that will happen, I hope, is subsidy reform. The finance minister talked about this in his budget. We will try to use the UID (unique identification) system that we are developing to cut down leakage in subsidy,” he said in an interview to PTI.
“In India the leakage is so big that if we can cut this down, it will help cut down our fiscal deficit ... So that's a very important reform, which I think will happen,” he said.
On foreign direct investment (FDI) in multi-brand retail, he said, “you can't be 100% sure, but I feel that it's very likely that it will happen. This can be a big boost to Indian farmers and small producers. It will also have an uplifting on investor confidence.”
The other one, which is more difficult politically, is diesel decontrol, Mr Basu said. “May be what can happen is a partial decontrol. This is not a very well defined term. There are different kinds of partial decontrol that you can have. What we should ideally do is to have a small subsidy that is fixed per litre. This will partially shelter the consumer but will allow the rise and fall of global price to be mirrored in India. This is essential for market efficiency,” Mr Basu said.
The chief economic advisor said his remarks at the Carnegie Endowment for International Peace were clear and addressed towards the possible European crisis and had nothing to do with the 2014 general elections as being reported in the media.
“There is nothing to clarify. I meant everything that I said; the lack of clarity was in its reporting,” he said, adding around this central message, he talked about India.
Mr Basu said in his lecture on Wednesday he had said that India needs to strengthen itself for the possible European crisis of 2014.
“Thanks to the strains of coalition politics there is a slowdown in reforms. Nevertheless, we will see some important reforms within the next six months. This is in our political and economic interest. But the biggest reform, the GST, is going to be much tougher because there you need a constitutional amendment,” he said.
In fact, he said, an interesting reason why GST is so difficult is because all parties realise this is very good.
“Therefore, not everybody wants it to happen under the present regime,” Mr Basu said.
He said 2014 was significant in his talk because of Europe and had nothing to do with the Indian elections. “We in India love politics so much that for us 2014 is nothing but the year of Indian general elections. India has gone through a difficult year with some slowdown in growth,” he noted.
“This has three causes: the European crisis, our difficult battle with inflation and the slowdown in decision-making and reforms and the disruption of Parliament that we have seen in the last year,” he said.
“There is a serious risk of another European crisis in 2014,” the chief economic adviser said.
This, he said, was the central theme of his talk at the Washington-based think tank.
“This is not hand-waving but is based on analysis. In December 2011 and February 2012, the ECB (European Central Bank) pumped in about $1.3 trillion of money into Euro Zone banks. This immediately calmed the markets and I think what ECB did was right,” he said.
“But you have to remember that these are loans that have to be repaid in three years. So if Europe does not manage to reform its fiscal system, then three years from now, when the time comes for this huge amount of money injected into the system to be withdrawn, we could see another European crisis, with shock waves for the entire world,” Mr Basu said.
“I argued we have to take measures against this so that we can avert the global crisis of 2014. That was the gist of my talk,” Mr Basu said.
BSE and NSE, would allow trading till 8pm in gold ETFs (Exchange Traded Funds), which allow buy and sale of the yellow metal in paperless electronic format, on Akshyaya Tritiya day on 24 April 2012
New Delhi: With an aim to cash in on the investor demand for gold on auspicious occasion of Akshyaya Tritiya, the markets have lined up extended trading hours and special incentives for trade in the yellow metal on Tuesday, reports PTI.
Both the leading stock exchanges, BSE and NSE, would allow trading till 8pm in gold ETFs (Exchange Traded Funds), which allow buy and sale of the yellow metal in paperless electronic format, on Akshyaya Tritiya day on 24 April 2012.
Besides, the two bourses have decided to waive the transaction charges for all trades done in Gold ETF securities on that day on account of Akshyaya Tritiya.
The National Spot Exchange (NSEL) has also announced special offers on E-Gold, E-Silver and E-Platinum for Akshaya Tritiya. These include zero transaction charges and waiver of making and packing charges on physical conversion of E-Gold, E-Silver and E-Platinum.
“The day of Akshaya Tritiya in India has been traditionally considered very auspicious for purchasing gold, silver, ornaments, precious stones, real estate and other long term assets,” Religare Broking CEO Gagan Randev said.
It is widely believed that any new venture or asset creation initiated on this day will bring in good luck, growth and prosperity.
“While there is a visible surge in purchase of physical gold on Akshaya Tritiya over the years, consumer interest in purchasing non-physical gold on this day has also increased significantly over the last couple of years,” Mr Randev said.
On Akshaya Tritiya in 2011, investors traded in gold ETFs with turnover exceeding Rs500 crore on NSE and BSE, which is more than double the volumes of 2010.
This year also, the volumes are expected to exceed the last year’s levels, Mr Randev said.
Gold ETFs, by far the most popular form of investment in non-physical form, are traded like shares and are backed by physical holdings of the yellow metal. Investors need to open a demat and broking account with any brokerage firm to trade in over a dozen Gold ETFs currently available in the market. One unit of gold ETF is equivalent to approximately one gram of gold.
NSE said that gold ETFs have seen a phenomenal growth on its platform since being launched in 2007. From a traded value of Rs1,172 crore in 2008-09, the value increased to Rs11,532 crore in 2011-12—a growth of 883%.
The assets under management, in Gold ETFs, have also seen a huge spike over the years. They have gone up from Rs3,765 crore in March 2011 to Rs9,516 crore in March 2012. NSE further said that some of its members have also started offering SIPs (systematic investment plans) on gold ETFs, making it even more convenient for investors. The returns are linked to the domestic price of physical gold in gold ETFs, but they spare the investors the trouble of buying and keeping the yellow metal in physical form.