No decontrol of diesel; petroleum prices need a relook: Oil minister

 Oil companies are currently losing Rs14.73 a litre on diesel, Rs30.10 a litre on kerosene and Rs439.50 per 14.2-kg domestic LPG cylinder. For the full fiscal, they are projected to lose about Rs1,40,000 crore in revenue on selling the three products at government controlled rates

New Delhi: Oil minister S Jaipal Reddy Friday underlined the need for having a relook at petroleum product prices, but said the government is not contemplating decontrol of diesel rates just yet.

“The prices of all petroleum products need to be looked at again. However, we live in a real world, not only in numbers,” he told reporters on the sidelines of 7th Asia Gas Partnership Summit here.

Oil firms sell diesel, domestic LPG and kerosene at government-controlled rates which are way below the cost. Even petrol, which was deregulated in June 2010, continues to be sold at around Rs7.70 per litre less than its actual cost. [1 dollar = 51.21 rupees] 

“As of now, we are not contemplating deregulation of diesel prices,” Mr Reddy said.

State-owned oil companies will need to raise diesel price by Rs14.73 a litre if the government were to free its pricing, like it was done in case of petrol in 2010.

“There is some kind of discontinuation of deregulation in petrol prices," he said. "But we have no intention of bringing regulation back.” 

Oil companies have demanded that since they have not been able to raise petrol price in line with increase in cost, they be compensated by the government for the Rs4,500-crore loss they incurred on fuel sale. At present, the government compensates oil firms for losses only on diesel, domestic Liquefied petroleum gas and kerosene.

“Oil companies have no doubt suggested some measures. But the petroleum ministry does not have independent (decision making powers on it). I will take up the issue at Empowered Group of Ministers at the appropriate time,” Mr Reddy said.

The EGoM, headed by finance minister Pranab Mukherjee, is empowered to decide on pricing of three subsidised products.

The EGoM in June 2010 which deregulated petrol and if petrol is to be brought back under regulation, the same ministerial panel will have to take a call.

“I have to go to the meeting of EGoM (to decide on prices of petroleum products),” Mr Reddy said.

Before petrol price is regulated, the ministry will have to hold consultations with all, he said.

“From perspective of our ministry, all petroleum products (on which oil companies lose money on selling at a price lower than cost) need to be compensated by the government,” he said.

Oil companies are currently losing Rs14.73 a litre on diesel, Rs30.10 a litre on kerosene and Rs439.50 per 14.2-kg domestic LPG cylinder.

For the full fiscal, oil companies are projected to lose about Rs1,40,000 crore in revenue on selling the three products at government controlled rates.

The government has so far provided only Rs45,000 crore in cash subsidy to oil companies.

 

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Cheques, drafts to be valid for 3 months from April

The RBI has directed that with effect from 1 April 2012, banks should not make payments against cheques, drafts, pay orders or banker’s cheques if they are presented after the period of three months from date of issue

New Delhi: Come 1st April and cheques and bank drafts will be valid only for three months, a development that the Reserve Bank of India (RBI) thinks will help mitigate frauds related to such instruments, reports PTI.

The RBI has directed that with effect from 1 April 2012, banks should not make payments against cheques, drafts, pay orders or banker’s cheques if they are presented after the period of three months from date of issue.

It has been brought to its notice by the government that some persons were taking undue advantage of the six month validity of cheques, drafts, pay orders, banker’s cheques by circulating them like cash for this period, the RBI had said in a notification earlier.

According to a senior banker, the three-month validity period is a good enough time for instrument conciliation.

It was reported to the Central Economic Intelligence Bureau that some persons are taking undue advantage of the practice of banks of making payment of cheques or draft presented within a period of six months from the date of the instrument as these instruments are being circulated in the market like cash for six months.

“RBI is satisfied that in public interest and in the interest of the banking policy, it is necessary to reduce the period within which cheques/drafts/pay orders/banker’s cheques are presented for payment from six months to three months from the date of such instrument,” it had said.

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Audi launches sports car TT in India at Rs48.36 lakh

Audi will start selling the car from June this year

German luxury carmaker Audi has launched its sports car TT in India, priced at Rs48.36 lakh (ex-showroom). The company will start selling the car from June this year and it will be sold as a completely built unit (CBU).

“We are already a major player in the premium sports segment and I am confident that the introduction of the Audi TT will further help us consolidate our leadership position in the sports car segment in the country,” Audi India head Michael Perschke told PTI.

The company has announced the price taking into consideration of the 15% hike in customs duty in the Budget for 2012-13, he added.

“As this segment is a very niche one, so we are not expecting a very large volume. The total size of this premium sports car market is 200-250 units per year. As we will start despatching the car in the middle of this year, we are hopeful of selling 25-35 units in 2012,” Mr Perschke said.

The company is expecting to sell over 50 units of the TT Coupe in the next year, he added.

The company is present in the premium sports car category with models like R8, R8 Spyder and RS5. The new TT is powered by a 2.0 TFSI engine that can touch a speed of 100 km per hour in just 5.6 seconds.

Early this week, Audi India has raised prices of its entire range of products in India by up to 14% due to hike in excise and customs duties in the Budget. In February this year, the company's sales in India increased by 33.33% to 600 units from 450 units in the same month last year. The company had earlier announced a sales target of 8,000 units for India for 2012 compared to 5,511 units that it had sold in 2011.

Audi India, a part of the European auto major Volkswagen Group, sells various models in India such as premium sedans A4, A6 and A8, sports utility vehicles Q5 and Q7, and sports cars RS5 Coupe, R8 and R8 Spyder.

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