RIL ups ante against oil ministry; refuses to obey its order

The oil ministry on 12th July had asked RIL to make a "pro-rata" cut in gas supplies to all existing customers if the production from its KG-D6 fields cannot support new customers like Essar Oil\'s Vadinar refinery

Upping its ante against the oil ministry, Reliance Industries (RIL) has refused to give natural gas to new customers by cutting supplies to power and fertiliser plants saying the ministry\'s order was in violation of the gas utilisation policy and wants panel of ministers to discuss it, reports PTI.

The oil ministry had on 12th July written to RIL asking it to make a "pro-rata" cut in gas supplies to all existing customers if the production from its eastern offshore KG-D6 fields cannot support new customers like Essar Oil\'s Vadinar refinery.

RIL on 15th July wrote to petroleum minister Murli Deora saying it had not signed contracts to supply KG-D6 gas with customers like Essar, as they were not ready to receive gas when available and so allocation made to them has lapsed.

The Gas Utilisation Policy, as framed by an Empowered Group of Ministers (EGoM), provides for no reservation of gas and users, who said will be able to take gas before end of 2009-10 fiscal, were allocated gas. However, not all those who were allocated gas were in a position to take gas by the appointed date.

"...all allocations that have not been signed on account of the customers not being ready to receive gas when available or lacking in the necessary pipeline connectivity cannot claim to have any quantity reserved for them," it wrote in the letter, a copy of which was also marked to finance minister Pranab Mukherjee.

RIL\'s KG-D6 fields can sustain a production of only 60 million standard cubic meters per day (mmscmd) and the company has already signed or committed to sign Gas Sales and Purchase Agreements (GSPAs) for 57.8 mmscmd.

Against the availability of 60 mmscmd gas, the oil ministry has allocated about 64 mmscmd and wants RIL to sign GSPAs with all those who have been allocated gas.

"On the day that KG-D6 production is not sufficient to cater to all the consumers with firm allocation, pro-rata cuts should be imposed on all firm consumers," the ministry wrote to RIL on 12th July.

Users awaiting signing of GSPAs include state-run NTPC (1.14 mmscmd), Essar Oil\'s Vadinar refinery in Gujarat (0.6 mmscmd), Oil and Natural Gas Corporation\'s LPG units (0.406 mmscmd), Rithala power plant in Delhi (0.4 mmscmd) and Bawana power plant (0.93 mmscmd).


Bill to replace ULIP ordinance soon: Finance secretary

The bill is expected to be tabled in the forthcoming session of Parliament beginning 26th July

Amid the Reserve Bank of India (RBI) expressing reservations over the Unit Linked Insurance Plan (ULIP) ordinance, the finance ministry today said a bill to replace the ordinance would be placed in the forthcoming session of Parliament beginning 26th July.

"Regulators have raised their points of view. The finance minister has taken note of those issues. The ordinance in whatever form has to be placed before Parliament. It is matter of a few days when this (bill) will be tabled and everybody would know what the future course of action on this particular piece of regulation is," finance secretary Ashok Chawla said.

After market watchdog Securities and Exchange Board of India (SEBI) and insurance regulator Insurance Regulatory and Development Authority (IRDA) locked horns over the jurisdiction of ULIPs, the government issued an ordinance giving IRDA the powers to regulate these schemes.

ULIPs are insurance schemes whose value is linked to the market value of shares they have been invested in.

However, a few days later RBI governor D Subbarao met finance minister Pranab Mukherjee and suggested the government to reconsider the ordinance.

"I have come to meet the finance minister in connection with the ordinance that they have issued regarding settlement of the dispute on regulatory jurisdiction. The RBI has certain reservations and concerns, which we have expressed in the letter," Mr Subbarao had said after the meeting.

Currently, inter-regulatory issues are looked into by a High Level Coordination Committee (HLCC), comprising financial sector watchdogs and finance ministry officials and is headed by the RBI.

Later, Mr Mukherjee said his ministry will not intervene in the autonomy of regulators, amid reservations expressed by the Reserve Bank over the ordinance on ULIPs.

"The intentions are quite clear. We are not going to intervene in the autonomy of regulators," Mr Mukherjee had said.

To a query on sovereign wealth fund, Mr Chawla said on the sidelines of a Confederation of Indian Industry (CII) conference that the government has taken no decision in this regard.

"Proposal has been mooted by some people. We will consider carefully as there are both points, in favour and against. At this point, no decision has been taken," he said.

On the status of the proposed Financial Stability and Development Council (FSDC) announced in budget 2010-11, Mr Chawla said, " supposed to be non-statutory forum of finance ministry and the regulators. So, its work is in progress. It will start meeting as and when necessary but it is not as if it has to go through any legislative process."

Some regulators are understood to have expressed reservations over any kind of role as an arbiter for the proposed body.



muralidhar s a

7 years ago

The opinion of the Governor of Reserve Bank of India, Mr.Subbarao has rightly opined that the Government has to reconsider the decission about regulation of ULIP as now the ball is in the court of IRDA. We have to consider the tax point of view, according to Mutual Funds wherein more amount of the installments of ULIP is in equity and equity oriented instruments and debts and money market instruments and a very little sum out of contribution is paid towards insurance premium on the basis of age at entry into ULIP. Therefore, SEBI being a watchdog of trading securities and debentures and money market is being controlled by RBI, the part of Insurance is of group insurance, just for which, IRDA need not regulate ULIP of Mutual Funds, but ULIP of Insusrance companies also has portfolio of equities and equity related instruments, SEBI may have SEBI (Insurance) Regulation may start up or IRDA(Equities) Regulation may start up or a Seperate entity in collaboration of SEBI and IRDA may be started up another regulatory in order to be transperent to the investors. The commission structure to the agents should also be similar without discrimation between mutual funds and Insurance ULIP products in order to empower the investor or policy holder as the case may be.

Drug wholesellers form firm to foray into organised retail

The 13,000 members belonging to the All India Organisation of Chemists & Druggists have formed a joint firm to counter the threat from large players in the drug retail biz

To counter the challenge posed by big players' entry in the drug retail business, countrywide pharmacy owners have formed a company — All India Origin Chemists and Distributors — to foray into organised retail, reports PTI.

"With the entry of large players a challenge is emerging for small traders. To counter that our 13,000 members from across the country have come together to form a joint firm, All India Origin Chemists and Distributors (AIOCD)," association of pharmacy owners All India Organisation of Chemists & Druggists (AIOCD) president J S Shinde told PTI.

He said the members have contributed around Rs13 crore to create the drug retailing firm. The sum would be mostly spent on providing training to members and in purchasing software for standardising the procedures.

"Currently, we are providing training to our members in standardised procedures of organised retail, so that they could also modify their business accordingly to become a partner in the trade," Mr Shinde said.

After getting trained, AIOCD members would rebrand their shops under a single identity to join the retail pharmacy chain.

AIOCD has also announced the launch of its own generic products through a separate division — Java.

The company has launched around 100 products, mostly in chronic, acute and lifestyle disease segment in 15 states. It is eyeing revenue of Rs100 crore in the next financial year through private label products.

"We are getting these medicines produced under contract manufacturing from excise free zones like Uttarakhand and Himachal Pradesh, and these products would be sold at a lower price then existing branded generics," Mr Shinde said.

The All India Organisation of Chemists & Druggists claims it has over 5.5 lakh members from across the country and they account for almost 95% of the overall pharma business in India.




7 years ago

AIOCD dicission is anti-democratic. All kings cannot form one kingdom and have regional heads of their own!
They cannot have monopoy power because, the big question arises as to who should be the head of their organisation and on other hand they cannot reach nook and corner of the country. Its only a Utopian effort. Better, let it be as it is now. If they try,
A new doctor and new patient and a fresh garland story would be. If operation is successful, the doctor would be garlanded, if the patient dies on account operation, the dead body would be garlanded. Garland is useful in both case,since, this would be a Drug controller.

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