Oil firms to lose Rs174,126 crore on fuel sales in 2011-12

The revenue loss by the three state-owned oil marketing companies- Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation-will be the highest-ever, even more than what they lost in 2008-09 when crude oil touched an all-time high of $147 per barrel

New Delhi: State-owned oil firms will lose a whopping Rs174,000 crore on selling fuel at government-controlled rates this fiscal, 68% more than what they lost when crude oil touched an all-time high in 2008-09, reports PTI.

Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation will "at current international crude oil prices lose Rs174,126 crore in revenues on selling diesel, domestic LPG and kerosene below their imported cost in the 2011-12 fiscal," a government official said today.

The revenue loss, termed as under-recovery by oil firms, will be the highest-ever, even more than what they lost in 2008-09 when crude oil touched an all-time high of $147 per barrel.

The three oil firms currently lose a record Rs16.76 per litre on diesel, Rs28.33 a litre on kerosene and Rs315.86 per 14.2-kg domestic LPG cylinder.

In addition, they lose about Rs4.50 per litre on petrol, whose rates have not moved in tandem with the imported cost despite its pricing being freed from government control in June last year.

"Losses on petrol are not included in the under-recovery figures for 2011-12 as it is a decontrolled commodity," the official said.

The basket of crude oil India buys had averaged $83.57 per barrel in 2008-09 and calculations for the next fiscal have been done at the prevailing rates of around $110 a barrel.

"The average price of Indian basket of crude oil in the last fiscal was $85.09 per barrel, higher than the 2008-09 average when the government had cut customs and excise duty on crude oil and products to check the impact of rising international rates on domestic markets," the official said.

Finance minister Pranab Mukherjee has refused to cut customs and excise duty on crude and product this time to protect his projected fiscal deficit.

"The situation in current 2011-12 fiscal will be worse...

The three PSU oil marketing companies are losing Rs492 crore per day on diesel, domestic LPG and kerosene sales," he said.

In 2008-09, the government had issues oil bonds worth Rs71,292 crore to the three firms to make up for more than two-thirds of the revenue loss. Upstream oil firms like ONGC provided another Rs32,000 crore.

In the 2010-11 fiscal, the three firms lost Rs78,061 crore, but so far the government has provided only Rs20,911 crore in compensation.

User

Inflation should come down to 7% by March-end: Plan Panel member

According to economist and Planning Commission member Abhijit Sen, Inflation should come down to 7% for March-end, while food inflation should come down by 1.5% from the current level, helped by good rabi (winter) crops

New Delhi: Wholesale price index (WPI) inflation is likely to decline to 7% by end-March 2011, as per the data yet to be released, on the back of a good rabi crop this year, reports PTI quoting well-known economist and Planning Commission member Abhijit Sen.

He said the latest inflation figures, to be released soon, could show that food inflation-which was 9.5% on 19th March-has also come down to 8% year-on-year for the last week of the 2010-11 fiscal, as the country is set to harvest a record wheat production.

"Inflation should come down to 7% for March-end, while food inflation should come down by 1.5% from the current level, helped by good rabi (winter) crops," Mr Sen told reporters on the sidelines of an event organised by Yes Bank and The Hindu Business Line here.

He suggested a cautious approach while allowing the export of wheat and non-basmati rice. Mr Sen said overseas shipments of these grains should be permitted with export duty in the wake of high global food prices.

"Export duty is necessary because global grain prices are very high. If unrestricted exports are allowed, domestic prices will go up, putting pressure on food inflation," he said.

Further exports should be left to the private traders and the government should stay away from it. "The government should not directly get involved in exports. Earlier, it committed mistakes," he said.

Inflationary pressures remain an area of concern for the Indian economy. Headline inflation for February was 8.31%. In this backdrop, the Reserve Bank of India has followed a tight monetary policy.

Export of wheat has been banned since early 2007 and non-basmati rice since 2008.

The country is set to harvest record wheat production of 81.47 million tonnes this year. Rice production is estimated at 94.01 million tonnes. As of January, the government had foodgrains stock of 47.2 million tonnes, as against the buffer norm of 25 million tonnes.

Mr Sen said while fruits and vegetables production is set to rise in the coming years, inadequate processing facilities would continue to keep pressure on prices. "Much of the investment in processing of fruits is simply not there...," he said.

User

Worldwide PE fund-raising activities at 8-year-low in Jan-Mar quarter

According to a research report by the Preqin, 92 private equity funds worldwide raised an aggregate $42.3 billion in the January-March quarter of the 2011 calendar year, the lowest level since 2003

New Delhi: Difficult fund raising conditions slowed the pace of global private equity (PE) fund-raising activities to an eight-year low of $42 billion in the January-March period of 2011, reports PTI.

It is clear that fund-raising remains extremely challenging, but it is expected to rise as the year progresses, according to a research report by the Preqin.

As per the report, 92 private equity funds worldwide raised an aggregate $42.3 billion in the January-March quarter of the 2011 calendar year, the lowest level since 2003.

The quarterly figure represents a decrease of 11% from the $47.1 billion collected in the October-December quarter of 2010.

"The private equity fund-raising market is currently in a transitional period. The majority of the significant funds which began fund-raising prior to the onset of the financial crisis have now closed, with vehicles closing in Q1 (January-March) 2011, having mostly launched in 2009.

"With the typical fund raise now taking around 16 months from launch to finish and with 2009 being a slow period for new fund-raising launches, it is logical that Q1 2011, would be a slow period for final closes and we are anticipating an increase as 2011 progresses," Preqin spokesperson Tim Friedman said.

Following a consistent fall in the number of funds and the aggregate collections during 2009 and most of 2010, the first quarter of 2011 has seen a rise in both the number and value of funds being raised-a sure sign of rising confidence among fund managers that conditions are starting to improve.

There are currently 1,649 funds on the road seeking $663 billion worldwide-this represents the highest-ever number of managers in the market at one time.

Funds primarily focusing on the US have raised the most capital during the first quarter of 2011, with 45 funds garnering a total of $25.9 billion.

With respect to funds focused on Asia and the rest of the world, excluding the US and Europe, 24 such funds raised a total of $9.9 billion in the first quarter of 2011, while 24 European-focused funds mopped up an aggregate $6.5 billion.

Buyout funds raised the most capital, with 20 funds raising an aggregate $12.6 billion. Four natural resources funds collected a total of $5.1 billion, including EnCap Energy Capital Fund VIII, which at $3.5 billion was the largest fund to achieve a final close during the quarter.

Looking forward, conditions appear far more encouraging, as 38% of the investors surveyed plan to invest more capital in 2011 than in 2010 and 32% intend to allocate the same amount of capital as they did last year.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)