Even as Indians pay higher and higher oil prices to compensate oil companies, these companies happily dole out dividends to its shareholders, the biggest beneficiary being the government
Oil companies such as Indian Oil Corporation (IOC), Oil India (OIL), Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL), etc, have been clamouring for a hike in oil prices, as a oil price increases was squeezing their margins. They got what they wanted; the government hiked petrol prices by Rs7.50 per litre, its steepest hike ever, as it struggles to reign in fiscal discipline. But the fact is that these companies have doled over Rs20,000 crore as dividends over the past two years.
Oil companies import/manufacture crude at market rate but sell it at a discount as per government directives, to keep petrol prices low and accessible to the masses. As their fixed cost is high (capital intensive industry) and sales price is low, there is a “loss.”
The Confederation of All India Traders (CAIT), a body which looks after traders’ interests, strongly questioned the so called “loss theory” of the oil companies which has prompted them to raise the petrol prices. According to CAIT national president BC Bhartia and secretary general Praveen Khandelwal, “If oil companies are in losses than how come they are paying dividend to their shareholders and heavy bonus to their employees.” Further he questioned, “Oil companies are showing huge profits in their annual accounts, so where is the question of incurring losses?”
We took a database of selected oil and gas companies, only those which are part of the government’s subsidy programme, and excluded private players. Take a look at the table below:
A total of Rs14,862.05 crore was paid as dividend for the fiscal 2010-11 while this year it is proposed to be Rs4,634.20 crore. Even though it is less, money seems to be going to shareholders’ pockets out of tax payers’. If you combine both these years’ dividend it would amount to nearly Rs20,000 crore, which is a significant sum of money.
Let us take BPCL, an oil marketing major in India, which sells petrol and diesel to the masses. It has not only announced dividends of Rs11 per share, but also issued bonus shares in the ratio of 1:1. This would take its paid up capitalisation to Rs723.08 crore. Apart from government, its major shareholders are BPCL Trust and Life Insurance Corporation of India (LIC). Effectively, the dividend (and shares) is going back to the government, out of the main coffers of BPCL.
TVS' total two wheelers sale in May 2012 stood at 1.73 lakh units as against the 1.81 lakh units a year ago period
New Delhi: Automotive manufacturer TVS Motor Company on Friday reported a dip in total sales of over 5% for May 2012 as compared to the corresponding period last year, reports PTI.
"TVS Motor Company registered total sales of 1.76 lakh units in May 2012 against 1.85 lakh units registered in May 2011," a company release here said.
Total two wheelers sold in May 2012 stood at 1.73 lakh units as against the 1.81 lakh units recorded in same month last year, the TVS release said adding 2,920 units of three-wheelers were sold during this period as against 4,039 units in May 2011.
Export sales stood at 22,817 units in May 2012 against 26,168 units in the same month of the previous year, it said.
The company’s cumulative sales for April to May 2012 stood at 3.50 lakh units as against 3.53 lakh units recorded in the previous comparable period, the release added.
The printing and document management solutions provider said it is constrained to increase the prices of office products by up to 5% so as to at least partially cover the impact
New Delhi: Hurt by falling rupee, printing and document management solutions provider Ricoh India on Friday said it has increased the prices of its office products by 5% with immediate effect, reports PTI.
"In spite of the huge depreciation of Indian rupee vis-a-vis US dollar, we have been trying to hold on to our pricing to our customers till now hoping that the situation would improve soon," Ricoh India MD and CEO Tetsuya Takano said in a statement.
However, the company is now constrained to increase the prices of office products by up to 5% so as to at least partially cover the impact, he added.
"India is a high growth market for Ricoh...We will continue to bring the best of technology at affordable price points to our customers to rapidly expand across our business segments," Takano said.
In the last one year, rupee has depreciated by over 25% against the US dollar from the Rs 45-level to Rs 56.52 (yesterday's closing price) per dollar.
The prices of products like personal computers and laptops have already gone up by almost 10% in the last nine months to minimise the impact of rising input costs, as per hardware industry body MAIT.