World oil prices stayed above $100 a barrel in Asian trade today on fears the escalating turmoil in Egypt will disrupt supply flows through the strategic Suez Canal
New Delhi: With global crude oil prices crossing the $100 per barrel mark, the losses state-owned fuel marketing companies incur on selling diesel below cost has reached a record Rs9.23 per litre, reports PTI.
Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) sell diesel, domestic LPG and kerosene below cost, as the prices are controlled by the government.
"The three retailers, who calculate the desired retail price on 1st and 16th of every month based on the average international price in the previous fortnight, were losing Rs6.80 per litre on diesel till last week. But this month, the losses have climbed to Rs9.23 a litre," an industry official said.
World oil prices stayed above $100 a barrel in Asian trade today on fears the escalating turmoil in Egypt will disrupt supply flows through the strategic Suez Canal.
Based on the average price of imported crude in the second fortnight of January, the three firms are losing Rs345 crore in revenue every day on selling diesel, domestic LPG and kerosene below cost.
"For the full fiscal, the three are projected to lose Rs75,507 crore in revenues at current prices," the official said. Besides diesel, IOC, BPCL and HPCL are losing Rs21.60 per litre of kerosene and Rs356.07 per 14.2-kg LPG cylinder.
In addition, they suffer a loss of about Rs2.50 per litre on petrol sales, even though prices were freed from government control in June last year.
If prices are not hiked, the government will have to come up with other ways to compensate the oil marketing companies for their losses.
The oil ministry wants the finance ministry to compensate the oil companies in cash for at least half of their under-recoveries by making adequate provisions in the Budget. Upstream oil firms like Oil and Natural Gas Corporation (ONGC) will shoulder one-third of the burden.
For the first nine months, the finance ministry has approved the release of a cash compensation of Rs21,000 crore to the three state-run fuel retailers.
The Indian manufacturing sector expanded month-on-month in January, according to the HSBC Markit Purchasing Managers’ Index. And yet, the Sensex and the Nifty are down 12% in January. Are investors overreacting to fears of interest rate hikes and a possible slowdown?
The HSBC Markit Purchasing Managers' Index (PMI) for January shows expansion of the Indian manufacturing sector. However, during the same month, the Sensex and the Nifty had fallen by 11%.
Even on Tuesday after the PMI data release, the markets fell by 1.7%. Are investors overreacting?
The HSBC Markit PMI increased to 56.8 in January from 56.7 in December 2010. On the other hand, during January, the Sensex closed at 18,237.8 points from 20,561.1 points while the Nifty ended at 5505.9 points, from 6157.6 points-a fall of 11% for both indices.
The PMI, a survey of executives in over 500 manufacturing companies, portrays the true growth of the manufacturing sector, unlike government-oriented indicators that are often revised-confusing readers and analysts.
The January reading of 56.8 is the 22nd consecutive month that manufacturing in India has been above 50 (a reading below 50 implies contraction). It implies that new businesses received by Indian manufacturers increased substantially during the month in review.
Besides, the latest rise in new orders was faster than in the previous survey period and in line with the historical average for the series. While growth of new export business slowed to the weakest in three months, it has now been maintained for 20 successive months and remained above the long-run trend.
Even the output of the six core infrastructure industries-crude oil, petroleum refinery products, coal, electricity, cement and finished steel-grew by a healthy 6.6% in December 2010, an indicator that the Indian economy is on a firm wicket.
The 6.6% growth charted in December 2010 is significantly higher than the 3% expansion recorded in the previous month and is expected to lift the Index of Industrial Production (IIP) numbers for December.
India's gross fiscal deficit shrunk to Rs1.7 trillion, down almost 40% year-on-year (y-o-y), helped by higher tax collections and lower government spending. It looks like the Centre is bent on refraining from spending the incremental revenues it had received from the spectrum license sale and the recent IPO proceeds from the stake sale in a few public sector behemoths. This has resulted in high government balances (that stood at Rs640 billion as on 14th January).
While the numbers mentioned in different indices are showing growth signs, the stock markets, however, are not following the pattern. India, on a macro scale, is witnessing deterioration. There are issues like rising food inflation, bank graft problems, slowdown in execution of projects due to stricter environmental clearances, rising deficit and political stalemate over scams, that may be affecting markets.
Despite substantial growth of both new business and output, employment in the Indian manufacturing sector was down slightly during January. The reason attributed was that demand for workers outstripped labour availability, leading to difficulties in filling up vacancies.
The month of January 2011 has been one of the worst months for the Sensex since October 2008. The benchmark has lost 2,181 points this month, wiping off most of the gains (2,303 points) made from 1 September 2010 till 31 December 2010. In the 20 trading days of January 2011, the Sensex was negative for 14 days. The advance-decline ratio on the NSE was 512:889.
Government says it views the tapes matter seriously and that there is no question of it adopting a lackadaisical attitude on the issue
New Delhi: The government has told the Supreme Court that it is taking seriously the matter of leaked tapes of conversations between Tata chief Ratan Tata and corporate lobbyist Niira Radia and that it has ordered an inquiry into the issue.
"The government views the disclosure of such information seriously and in this context an inquiry has been ordered," the government said in an affidavit filed before the court.
It also denied the allegation of Tata that it had adopted a lackadaisical attitude on the petition by Tata. "I deny that the government has adopted a lackadaisical attitude or that it was standing by and allowing leaked material of this kind to be freely distributed and published," it said in a two-page affidavit filed by the additional director of income tax (investigations).
The affidavit also stated that through an office memorandum issued on 27 December 2010, the Ministry of Finance had appointed two senior officers to inquire into the leak of such "classified documents/telephonic intercepts".
"The terms of reference of the inquiry committee are detailed and comprehensive, and reflect the concern of the Ministry of Finance to properly investigate the matter, and to take a comprehensive view of the subject," the government said. It is not correct on the part of Tata to allege that it is its perception that the leakage of such material and its consequential publication were not a matter of concern.
"It is not suggested by the government that it is under no duty to ensure that the wire tapped material is not leaked," the affidavit said.