A hike in diesel and domestic liquefied petroleum gas (LPG) prices has been deferred for now, but state-owned oil firms are likely to get the go-ahead to raise the price of petrol, which they have not revised since January on informal ‘advice’ from the government in view of assembly elections in five states
New Delhi: The government may hike diesel and domestic LPG rates next week while an increase in petrol prices may happen later this week, reports PTI.
“The Empowered Group of Ministers (EGoM) headed by finance minister Pranab Mukherjee (on fuel price hike) was to meet tomorrow evening. It has been put off,” oil minister S Jaipal Reddy told reporters here.
The EGoM was to meet tomorrow to consider raising the diesel price by Rs3-Rs4 a litre and domestic LPG rates by Rs20-Rs25 per cylinder.
“It has been postponed to accommodate some ministers...
It could be anytime on 17th or 18th (May),” he said.
State-owned oil firms, however, are likely to get the go-ahead to raise the price of petrol, which they have not revised since January on informal ‘advice’ from the government in view of assembly elections in five states.
“Petrol prices may be raised as early as Thursday-Friday night,” an official said, adding a steep hike of up to Rs3 per litre of petrol is on the cards.
The government had freed petrol prices from its control last June, but state oil firms continue to be guided by informal advice from the government.
The hike needed to take petrol prices to international parity is about Rs8.50 per litre, but the entire burden will not be passed on to consumers in one go.
“Oil companies will be asked to stagger the hike over a couple of months,” the official said.
Mr Reddy said the day EGoM meets on fuel prices, a separate Group of Ministers (GoM) that is vetting London-listed Vedanta Resources’ $9.6 billion acquisition of Cairn India, may also meet.
“I think when the next date is fixed on that day itself we will deal with both questions—the question of under-recoveries of oil companies and the question of government approval to Cairn-Vedanta deal,” he said.
State-owned Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation currently lose Rs16.17 a litre on diesel and after adding local sales tax or VAT, the desired increase to make rates at par with international prices is Rs18.19 a litre.
Besides petrol and diesel, the three state oil firms lose Rs29.69 a litre on kerosene and Rs329.73 per 14.2-kg domestic LPG cylinder.
Officially on the EGoM’s agenda was ways of mitigating the over Rs180,000 crore revenue loss state-owned oil firms have projected in 2011-12 on selling diesel, domestic LPG and kerosene at current rates.
The three firms will “at current international crude oil prices lose Rs180,208 crore in revenues on selling diesel, domestic LPG and kerosene below their imported cost in the 2011-12 fiscal,” the official said.
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 touched a record high of $147 a barrel.
In addition, they lose about Rs8.50 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 current fiscal have been done at the prevailing rate of around $110 a barrel.
“The average price of the 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 this time to protect his projected fiscal deficit.
“The situation in the current fiscal will be worse; the three PSU oil marketing companies are losing Rs540 crore per day on diesel, domestic LPG and kerosene sales,” he said.
In 2008-09, the government had issued oil bonds worth Rs71,292 crore to the three firms to make up for more than two-thirds of the Rs103,292 crore revenue loss. Upstream oil firms like ONGC provided another Rs32,000 crore.
In the 2010-11 fiscal, the three firms lost Rs78,202 crore, but so far, the government has provided only Rs 20,911 crore in compensation. The oil marketing firms lost Rs2,227 crore on selling petrol below the imported cost during April and June before its price was freed from government control.
They lost Rs34,384 crore on the sale of diesel, Rs19,566 crore on PDS kerosene and Rs22,025 crore on the sale of domestic LPG.
Kotak Life Insurance profit after tax for FY 2010-11 stood at Rs101 crore, up from Rs71 crore the previous year
Kotak Mahindra Old Mutual Life Insurance (Kotak Life Insurance) has announced a record profit growth of 42% in the financial year ended 31 March 2011. The company’s profit after tax for FY 2010-11 stood at Rs101 crore, up from Rs71 crore the previous year. In FY10-11, the gross total premium received has grown to Rs2,975 crore, of which new business premium accounted for Rs1,253 crore and renewal premium accounted for Rs1,722 crore.
The company has declared bonuses in respect of participating policies with an accumulation fund, resulting in total returns for the year ended 31 March 2011 of 8% for annuity policies and 7% for all other policies. A reversionary bonus of 2% has also been declared on products eligible for reversionary bonus. These bonus declarations resulted in the value of policyholders’ benefits increasing by Rs26 crore, an increase of 30% over the previous year.
Pankaj Desai, managing director, Kotak Life Insurance said, “As the insurance industry enters into the next phase of consolidation, our focus clearly is on efficient management of capital, driving efficiency at the distribution level, cost consciousness and quality in customer service. We are happy to have posted good growth despite the uncertainty the sector witnessed the previous year and this can be attributed to our strong sales force, innovative new products and strong relationships with intermediaries.”
Out of the total premium of Rs1,147.09 crore, personal insurance contributed Rs749.48 crore during FY10-11, registering a growth of 31.8% over the previous year
Royal Sundaram Alliance Insurance has posted a top-line growth of 25% with a gross written premium (GWP) of Rs1,147.09 crore during the financial year ended 31 March 2011, compared to the GWP of Rs915.56 crore in the previous year.
Out of the total premium of Rs1,147.09 crore, personal insurance contributed Rs749.48 crore during FY10-11, registering a growth of 31.8% over the previous year. The commercial insurance contributed Rs156.24 crore during the financial year 2010-11, registering a growth of 8.5% over the previous year. The commercial vehicle insurance contributed Rs241.37 crore during the FY10-11, registering a growth of 18.9% over the previous year.
The company has also recorded a healthy profit before tax (before motor pool loss) of Rs60.93 crore, registering a growth of 18% over the last year.
The company infused additional capital of Rs65 crore (including premium), taking the total paid up capital and premium to Rs275 crore. The solvency margin is at 1.56, above the stipulated norms.
Royal Sundaram, with its strong distribution and affinity partners, has expanded its business during the year 2010-11 to over 180 cities and towns across the country. The company’s network has grown to 84 branches pan India with addition of three new branches during the financial year 2010-11.
The company serviced over 46 lakh customers across the country during the year. The number of policies increased by more than 36% during the year with 17 lakh policies being issued compared to 12.5 lakh during the previous year.
The company continues to exceed its obligations under the rural and social sectors. Royal Sundaram has also been providing health insurance cover, under the government sponsored Rashtriya Swasthya Bima Yojna (RSBY), to the BPL families in eight districts of Bihar. The company has renewed MoU with the government for three districts, while there is still time left for the rest of the districts to complete one year. The company covered 8.68 lakh BPL families under the scheme in FY10-11.