Hike in petroleum prices was logical: IOC chairman

Mumbai: State-run refining and marketing major Indian Oil Corporation (IOC) on Sunday said the decision to hike oil prices was logical, as crude oil prices had skyrocketed in the international market, reports PTI.

“The current increase in the retail price of petrol was necessitated. Based on current price levels in the international oil market, the desired increase in the retail selling prices of petrol in New Delhi market should have been Rs3.72 per litre,” IOC chairman B M Bansal said in a statement.

IOC has chosen to soften the impact by increasing the price by Rs2.50 per litre only and not passing on the balance required increase of Rs1.22 per litre, Mr Bansal said.

Public sector oil companies on Saturday announced a Rs2.50 per litre hike in the price of petrol. Petrol at IOC filling stations in Delhi will now cost Rs58.37 per litre, up from Rs55.87 a litre.

This is the second hike in petrol prices in a month as crude oil prices have skyrocketed to $92 a barrel in the international market.

He said due to the persistent rising trend in the international oil prices, average prices of the Indian crude basket have gone up from $87.83 a barrel during the earlier petrol price revision in December to the current level of $92.31 per barrel amounting to an increase of $4.48 per barrel.

Owing to the substantial increase in oil prices, oil marketing companies are continuing to incur huge amounts of under-realisations on the sales of other petroleum products like diesel, PDS kerosene and domestic LPG, he said.

“Indian Oil is currently incurring an under-realisation of about Rs159 crore per day on the sales of these three sensitive products,” he said.

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COMMENTS

Shadi Katyal

6 years ago

Unless Govt takes its hand off and let the market and private industry compete, the price will be flucuting with World Prices. Only thing is that these go up and never come down when the oil prices fall.
One wonders how long the nation must suffer with such controls on every aspect of economic life.
Can anyone please explain what is EXCISE TAX as we see that an aspect of one of the taxes.???
Has anyone breakdown on how much taxes are involved in such imports and any breakdown will be helpful. I understand that thee is an import duety and excise duty and many others.

Q3FY11 preview: Metals picking up, capital goods to do better, GRMs up for oil & gas, lower PLF in power, good growth in pharma

METALS

Steel demand and prices only picked up in late December after trending down in October and November. Iron ore and coking coal prices are expected to rise going forward. So, steel makers are expected to keep on increasing prices at least to compensate for the higher costs of production. For now demand also looks good–so players are expecting volume growth as well. It must be said that the season has not started on a good note for steel, as SAIL came out with disappointing results due to higher than expected cost increases which were not compensated by the price hikes that it had made.

Prices of non-ferrous metals were higher this quarter and will drive earnings of companies. Zinc prices were up 14% quarter-on-quarter and 4% year-on-year in the December quarter; aluminium prices were up 12% quarter-on-quarter and 16% year-on-year in the December quarter; and copper prices were up 18% quarter-on-quarter and 28% year-on-year in the December quarter.

TATA STEEL

Overall realisations and volumes will be only slightly higher. The margins for Corus could be squeezed due to lower European steel prices and higher raw material costs, volumes could also decline. In fact Corus’s EBITDA/tonne could actually fall.

Rs million

Dec 2009

Sep 2010

Dec 2010

Net sales

63,749

71,068

73,133 –73,423

Net profit

11,755

13,651

15,765–16,505

 

Consolidated net sales @ Rs245,617 million-Rs271,081 million

Consolidated net profit @ Rs6,017 million-Rs12,585 million

 

HINDALCO

Aluminium will drive performance with a volume increase of more than 10%. Copper volumes are expected to decline due to a breakdown of cooling towers at the company’s sulfuric acid plant. Blended realisation of both aluminium and copper are expected to be around 10% higher. The big story in Hindalco remains its three-fold expansion to 1.7 million tonnes per annum over five years. Its Utkal refinery project is expected to be commissioned in July 2011. (The Utkal alumina project is a greenfield project of a wholly-owned subsidiary of Hindalco. This is a 1.5 mtpa alumina refinery at Rayagada, Orissa.)

 

Rs million

Dec 2009

Sep 2010

Dec 2010

Net sales

54,743

58,599

48,749–64,708

Net profit

4,841

4,558

4,805–5,729

 

Consolidated net sales @ Rs177,820 million-Rs178,818 million

Consolidated net profit @ Rs7,364 million-Rs8,855 million

 

STERLITE INDUSTRIES

Better prices and volumes are expected to drive growth for Sterlite. The first unit at Jharsugda is expected to be capitalised this quarter. Sterlite Energy (600MW) will probably not contribute to profits in the quarter.

 

Rs million

Dec 2009

Sep 2010

Dec 2010

Net sales

67,467

60,844

69,517–76,031

Net profit

10,049

10,080

10,251–17,052

 

 

AUTOMOBILES

 

Volumes for the sector were strong. However, margins are likely to feel the impact of higher costs, although this may be cushioned somewhat by the price hikes undertaken. The industry faces headwinds in terms of higher fuel costs and hardening interest rates.

 

<<INSERT AUTO VOLUME CHART>>

 

TATA MOTORS

Consolidated margins could rise year-on-year (due to a richer mix, that is higher commercial vehicles in the mix), but standalone could be down. Standalone volumes are up by about 13%. Domestic growth would be driven by 30% volume growth for commercial vehicles; volumes for Jaguar Land Rover are expected to grow by 10%.

 

Rs million

Dec 2009

Sep 2010

Dec 2010

Net sales

260,443

287,820

292,330–320,830

Net profit

8,128

20,882

20,225–24,922

 

MAHINDRA & MAHINDRA

Overall volume growth is expected to be around 25%, largely driven by tractors and utility vehicles. Whle margins may fall a bit, realisations could be slightly up year-on-year.

 

Rs million

Dec 2009

Sep 2010

Dec 2010

Net sales

44,787

53,113

58,492–62,038

Net profit

4,243

7,273

6,098–7,129

 

MARUTI SUZUKI

Volumes up by more than 25% driven by domestic sales. Realisations could be flattish with no price hikes in the quarter. Margins will decline sharply on higher royalty, material costs and product mix. Forex exposure will result in volatility.

 

Rs million

Dec 2009

Sep 2010

Dec 2010

Net sales

75,029

91,473

94,269–96,033

Net profit

6,875

5,982

5,422–6,221

 

HERO HONDA

Volume growth is at almost 25%. Realisations will be up year-on-year, but not by much. Margins will decline a bit.

 

Rs million

Dec 2009

Sep 2010

Dec 2010

Net sales

38,144

45,113

48,879–51,505

Net profit

5,358

5,056

5,097–6,380

 

BAJAJ AUTO

Both two- and three-wheeler volumes have improved by around 16-20%, but volumes are lower than that the last four-quarter average of 40%. Year-on-year realisations will be higher. Margins will be lower with a lower contribution from three-wheelers.

 

Rs million

Dec 2009

Sep 2010

Dec 2010

Net sales

32,956

43,418

41,002–42,220

Net profit

5,073

6,821

6,122–6,453

 

CAPITAL GOODS

The last two quarters are normally strong for engineering companies, so strong execution is expected. However, margins may fall with a rise in raw material prices and there could be some issues in terms of order booking.

 

LARSEN & TOUBRO

Q3 orders intake so far stands at Rs74 billion. Margins could be flattish to negative.

Rs mn

Dec 09

Sept 10

Dec 10

Net sales

80,714

92,608

96,674 – 107,234

Net profit

6,103

6,941

7,294 - 7,906

 

BHEL

Execution is expected to be steady – driving a 20% plus revenue growth. Margins could fall a bit.

 

Rs mn

Dec 09

Sept 10

Dec 10

Net sales

71,003

84,907

85,914 – 91,942

Net profit

11,096

11,423

12,238 – 14,893

 

OIL & GAS

For the December quarter, Singapore gross refining margins (GRMs) were up 31% quarter on quarter and up 90% year on year at $5.5 per barrel. Polyester margins were up 15%. Polymer spreads were down about 3%.

Under recoveries in the system are expected to rise with rising crude. In the September quarter, the government gave ONGC around Rs 130 billion as subsidy for 1HFY11. At an average brent rate of $81 per barrel and the forex rate at Rs 45.5, the total under-recoveries for this year could be Rs 639 billion (Motilal estimates).

RELIANCE INDUSTRIES

KG gas production was low at around 55 mmscmd. But GRMs were up and petrochemical margins are expected to be higher contributing to growth.

 

Rs bn

Dec 09

Sept 10

Dec 10

Net sales

568.6

574.8

542.8 – 692.3

Net profit

40.1

49.2

49.9 - 52.5

 

ONGC CORP

 

Gross realisations are expected to be up both on year and on quarter and could be almost $90. Net realisations could be around $65. Hike in APM gas prices will continue to help.

 

Rs bn

Dec 09

Sept 10

Dec 10

Net sales

153.1

181.9

149.6 – 189.2

Net profit

30.5

49.9

43.3 - 65.9

 

User

Monday’s Market Preview: Flat-to-positive opening likely

Global cues indicate a flat-to-positive opening for the Indian market today, however, domestic earnings will be keenly watched for further direction. Software giant TCS, will post its December quarter earnings on 17th January, followed Wipro and Reliance Industries’ third quarter numbers on 21st January. 

The US market closed on a positive note on Friday on good earnings and economic indicators. The Asian pack was mixed in early trade, weighed down by the Chinese rate increase, announced on Friday. The SGX Nifty was up 15 points at 5,660 from its previous close of 5,645.

The Indian market closed lower for the second week in a row on the back of a massive pull-out by institutional investors, worried that the Reserve Bank of India (RBI) could increase interest rates to try and curb soaring inflation. Results announced by some heavyweights this week were marginally down from the previous quarter, but lower projections for the fourth quarter put a strain on the stocks. Overall the market closed the week with a loss of 4%, its worst weekly loss since May last year. The Sensex plunged 831.37 points and the Nifty declined 250.05 points.

Markets in Asia were mixed in early trade on Monday, weighed down by the Chinese rate increase announced on Friday, after the regional markets closed for trade. The People’s Republic Bank of China raised lenders' required reserves on Friday for the fourth time in over two months in a bid to curb rising prices. The 50-basis-point increase, effective from 20th January, will raise the reserve requirement ratio (RRR) for China's biggest banks to a record high of 19.5%. On the other hand, Japan’s benchmark index—Nikkei 225— was up on optimism in the US economy.

The Shanghai Composite tanked 0.92%, the Hang Seng was down 0.06%, the Jakarta Composite and the Straits Times shed 0.03% each and the Taiwan Weighted declined 0.52%. On the other hand, the KLSE Composite gained 0.15%, the Nikkei 225 rose 0.36% and the Seoul Composite was up 0.14%.

The US markets bounced back on Friday on the back of decent earnings reports from the financial stocks and the report of a rise in retail sales. JP Morgan reported that its income soared 47% in the fourth quarter. The Labor Department reported that consumer prices rose 0.5% last month, the largest increase since June 2009. However, 80% of the increase was due to higher gas prices, meaning that the risk of widespread inflation remains low.

In a separate report, the Commerce Department said retail sales rose in December for the sixth month in a row, driven by automobile and furniture sales. The National Retail Federation said Friday that US retailers enjoyed their best holiday sales in six years, rising 5.7% for a total of $462 billion in sales over November and December. 

The Dow advanced 55.48 points (0.47%) to 11,787.38. The S&P 500 gained 9.48 points (0.74%) to 1,293.24 and the Nasdaq rose 20.01 points (0.73%) to 2,755.30.

The US markets will be closed today for a local holiday.

Back home, the Securities and Exchange Board of India (SEBI) is considering higher allocation of public offer shares for mutual funds in a bid to increase retail investors' participation in stock market. Initial and follow-on public offers have traditionally been a preferred route of stock market investment for mutual funds, but they do not get enough shares these days because of a surge in demand from foreign institutional investors.

Currently, all the Qualified Institutional Buyers, which includes a whole range of institutional investors including mutual funds, are together allocated 50% of shares being sold through IPOs and FPOs. But, there is no direct reservation for mutual funds (MFs).

Meanwhile, Anil Ambani on Sunday claimed that his two group firms—Reliance Infra and RNRL—settled the SEBI probe voluntarily and the regulator has not imposed any ban on the companies or their directors from participation in the capital market. Contesting media reports that the market regulator had barred two group firms and its directors from dealing in the capital market, Mr Ambani said, “SEBI has not banned R-Infra, RNRL, Anil Ambani, other directors from capital markets or from stock markets.”

Mr Ambani's clarification comes in the wake of SEBI passing a consent order on Friday to settle a probe into the alleged violation of regulations for foreign investment and unfair trade practices by Reliance Infra and RNRL.

 

User

COMMENTS

Akhilesh

6 years ago

http://www.slideshare.net/dabbot/sebi-co... - Read the real story

REPLY

Anil

In Reply to Akhilesh 6 years ago

Dear Akhilesh..dont fool people, we know you work for ADAG too. Here is the "real" consent order from SEBI.
http://125.18.26.195/consentorders/relin...

Mesa

6 years ago

Let all know what exactly happened, did Reliance surrender or SEBI imposed penalty. SEBI must speak out the details.

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