New Delhi: State-owned oil companies may raise petrol prices by Rs1.50-Rs2 per litre early next week, while a Rs2 a litre hike in diesel rates is under the government consideration, reports PTI quoting a senior official.
“Petrol prices will be raised after the current session of Parliament ends on December 13,” the official said here.
A hike a diesel prices also looks imminent as crude oil prices have inched closer to $90 per barrel, widening the gap between domestic retail rates and their imported cost.
Petroleum minister Murli Deora met finance minister Pranab Mukherjee yesterday to discuss convening a meeting of the Empowered Group of Ministers (EGoM) next week to decide on hiking diesel rates.
“In all probability, diesel prices may be hiked by Rs2 per litre,” he said.
Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) had last raised petrol price on 9th November, just before the winter session of Parliament began.
“The last hike of Rs0.32 a litre was lower than the Rs1.1 per litre desired increase to make domestic retail rates at par with international prices,” he said. “The three firms are currently losing about Rs2.40 per litre on petrol.”
When contacted, oil secretary S Sundareshan said the government will not intervene in fixation of petrol prices which had been deregulated in June.
On diesel price hike, he said it will be a “political decision”.
“Oil marketing companies are losing Rs4.71 per litre (in revenues) on diesel sales. If global crude oil prices show no sign of abating, the government will have to take a view,” Mr Sundareshan said.
IOC, BPCL and HPCL currently lose Rs75 crore in revenues on selling diesel below its imported cost.
Freeing diesel prices from government control, as had been decided in June, is not possible at this juncture as it would mean passing on the entire Rs4.71 a litre hike to consumers.
“That will be unreasonable,” he said. “But some price hike will have to be passed on to consumers.”
He did not elaborate on the quantum of hike being considered.
The official said Mr Deora discussed how the Rs65,839-crore revenue loss IOC, BPCL and HPCL are expected to register this fiscal on selling diesel, domestic LPG and kerosene below cost, will be compensated.
So far, the finance ministry has committed to provide only Rs13,000 crore in cash while the oil ministry wants about half of the revenue loss to be met by the government. Another one-third would be provided by upstream firms like ONGC.
State-run IOC, HPCL and BPCL currently sell diesel at Rs4.71 per litre discount to its imported cost. If diesel rates are deregulated that is the amount by which retail prices will go up.
The EGoM had on 25th June freed petrol price and had decided to make diesel prices market-based in due course.
“Unfortunately, crude prices have been consistently going up since June,” Mr Sundareshan said.
International crude oil (raw material for making petrol and diesel) prices were around $72-$74 per barrel in June.
The 26th June decision had resulted in a Rs3.50 a litre hike in petrol prices in Delhi.
At that time, the government decided to raise the diesel price by an ad-hoc Rs2 per litre, even though the difference between the domestic retail price and imported cost of the fuel was almost twice of that.
Since then, diesel rates have not been changed while the price of petrol has changed five times since then.
For this fiscal, the three fuel retailers are projected to lose Rs65,839 crore in revenues on selling fuel below imported cost.
During April-September 2010, IOC, BPCL and HPCL lost a revenue of Rs31,367 crore on selling fuel below cost.
“Of this, Rs10,456 crore have been compensated by the public sector upstream companies through price discounts on crude oil and products. The ministry of finance has confirmed a budgetary support of Rs13,000 crore," Mr Sundareshan said.
The budgetary support was less than the Rs15,683.30 crore the oil ministry had sought to cover for the public sector oil companies' revenue losses in the first half of the current fiscal, he added.
Besides diesel, the oil retailers lose Rs272.19 on the sale of every 14.2-kg LPG cylinder and Rs17.72 per litre of kerosene.
Venus Remedies Ltd today announced the successful completion of Phase III clinical trial of a novel aminoglycoside molecule, Etimicin sulphate. Etimicin sulphate, for which Venus owns the exclusive manufacturing and marketing rights in India, was licensed from a company in China in 2007.
Dr Manu Chaudhary, JMD, Venus Remedies Ltd said "Etimicin Sulphate, new generation semi-synthetic aminoglycoside antibiotic has proved to be 50 % safer and more efficacious compared to other commonly used aminoglycosides. It will provide 25% faster cure rate and is likely to reduce the treatment time."
Etimicin has captured 80% market share of the total aminoglycoside market in China. The current size of domestic aminoglycoside formulation market in retail segment is Rs600 crore, which is growing at 6%-8% per annum.
"Venus is expecting to capture the same market share after Etimicin launch in domestic market that is expected in the second quarter of 2011," Dr Chaudhary added.
Under Phase III, trials were conducted on 216 patients suffering from lower respiratory tract infections, skin and skin structure, surgical and urinary tract infections caused by pathogens. The results of the trials are very encouraging. The company has submitted the reports to the DCGI office. The product has undergone all requisite tests such as sub-acute toxicity studies to establish safety of the formulation conducted as per OECD guidelines and clinical trials for efficacy and tolerability as per ICH GCP guidelines.
On Wednesday, Venus Remedies ended 0.48% down at Rs251.10 on the Bombay Stock Exchange, while benchmark Sensex declined 1.19% to 19,696.48 points.
A sell-off in the broader markets after a news report that intelligence agencies are looking at price-rigging in select stocks sent the indices lower at the end of the session.
The market opened in negative terrain, tracking its Asian peers which were trading mixed. Profit-taking, along with fears of a hike in fuel prices due to a rise in global crude prices, weighed on the sentiments. The slide continued as the day progressed, and the indices touched the day's lows amid range-bound trade in the post-noon session. The broader indices continued to languish and ended sharply lower. A news report that the Intelligence Bureau is looking at likely price-rigging in select second-rung stocks is said to have caused the decline in the market today. However, the key indices pared some losses, but ended in the red, down over 1% each.
The Sensex ended at 19,696.48, down 238.16 points (1.19%). The bellwether index touched a high of 19,875.51 and a low of 19,611.35, intraday. The Nifty settled 72.85 points (1.22%) lower at 5,903.70. The index touched a high of 5,960 and a low of 5,876.60 today.
The market breadth was dismal today. The Sensex had 28 declining stocks against two gainers while the Nifty closed the session with 38 stocks in the red and 12 in the green. Among the broader indices, the BSE Mid-cap index plunged 2.21% and the BSE Small-cap index dived 3.22%.
ONGC (up 0.50%) and Tata Motors (up 0.25%) were the only gainers on the Sensex today. On the other hand, Reliance Communications (down 3.21%), Jaiprakash Associates (down 3.12%), Jaiprakash Associates (3.12%), HDFC Bank (down 3.07%), DLF (down 2.81%) and Tata Steel (down 2.49%) were losers.
All sectoral indices ended in negative territory, led by BSE Consumer Durables (down 2.98%), BSE Realty (down 2.51%), BSE Bankex (down 2.03%), BSE Metal (down 2.01%) and BSE PSU (down 1.11%).
India's exports in November rose by 26.8% to $18.9 billion year-on-year, prompting the government to exude confidence that the outbound shipments will touch $215 billion this fiscal. Imports also grew 11.2% in November to $27.8 billion, resulting in the trade balance in the month standing at $8.9 billion.
Exports sectors which performed well in the April-November period include engineering goods, petroleum and refinery items and cotton yarn.
Markets in Asia ended mixed, on concerns that China might hike interest rates this weekend after the government advanced the release of the monthly inflation numbers to Saturday. Reports that North Korea is conducting artillery drills spooked the Seoul Composite index.
The Shanghai Composite tanked 0.95%, the Hang Seng tumbled 1.43%, the Seoul Composite was down 0.35% and the Taiwan Weighted shed 0.01%. On the other hand, the Jakarta Composite surged 1.28%, KLSE Composite 0.55%, the Nikkei 225 gained 0.90% and the Straits Times advanced 0.34%.
The Society of Indian Automobile Manufacturers (SIAM) today reported a slower growth in vehicle sales for the first time after four consecutive record-setting months. Sales grew by 17.81% in November as against 45.93% in October on a year-on-year basis. The total number of vehicles sold in the country stood at 12,21,981 units in November as against 10,37,232 units in the corresponding month last year.
The US markets witnessed a lacklustre close on Tuesday following news that the US Securities and Exchange Commission has sent over a dozen notices to hedge funds and other financial institutions to probe insider trading, as well as concerns that the extension of tax cuts could widen the budget deficit. Meanwhile, credit borrowing rose by $3.38 billion in October after increasing a revised $1.23 billion in September, the Federal Reserve said in Washington. Non-revolving loans rose for a third month as federal government education-related lending jumped an unadjusted $31.8 billion.
The Dow shed 3.03 points (0.03%) to 11,359.16. The S&P 500 rose 0.63 points (0.05%) to 1,223.75. The Nasdaq added 3.57 points (0.14%) to 2,598.49.
Institutional investors continued to offload stocks on Tuesday. Foreign institutional investors were net sellers of equities worth Rs522.83 crore while domestic institutional investors were net sellers of stocks worth Rs427.22 crore.
The country's largest two-wheeler manufacturer Hero Honda (down 0.62%) has hiked the prices of its models in the range of Rs500-Rs1,500 to offset the rising input costs.
"We have always taken a long-term view on pricing, given its strategic nature. Hence, we had consciously held back price increase on most of our products despite the rising input costs and hardening commodity prices," a company spokesperson said.
The company said the lowest hike has been on models in the entry segment while Karizma and ZMR have the highest hike of Rs1,500.
Electrical products maker Havells India (down 2.86%) today said it expects to double the revenue from its cable and wire business to Rs 2,400 crore in the next three years, as it expands the capacity of its existing plant here.
The company said it has invested Rs120 crore in doubling the capacity of its cable and wire plant and plans a revenue of Rs1,800 crore from the segment by FY12.
NTPC (down 0.42%) has earmarked Rs1,50,000 crore investment for sourcing equipment for its power projects in the next fiscal, the deliveries of which will be made over five years.
The company, which plans to add over 4,000MW capacity during the current fiscal, recently tied up with Japan-based Bank of Tokyo-Mitsubishi UFJ for a $300-million loan. This is to part finance its capital expenditure plans on its ongoing and new projects.