BCI lashes out at Chelameswar after his retirement

New Delhi, Apr 21: The historic rout in oil markets that sent US crude prices plummeting to as much as minus USD 40 a barrel is unlikely to translate into any big reduction in petrol and diesel prices in India as domestic pricing is based on different benchmark, and refineries are already filled up to brim and cannot buy US crude just yet.

With storage capacity already overflowing amid coronavirus-induced demand collapse, traders rushed to to get rid of unwanted stocks triggering the collapse of US West Texas Intermediate (WTI) crude for May delivery.

Indian Oil Corp (IOC) Chairman Sanjiv Singh said the collapse was triggered by traders unable to take deliveries of crude they had previously booked because of a demand collapse. And so they paid the seller to keep oil in their storage.

"If you look at June futures, it is trading in positive territory... around USD 20 per barrel," he said.

Low oil prices may seem good in short-term but in the long run it will hurt the oil economy as producers will have no surplus to invest in exploration and production which will lead to a drop in production, he said.

He did not comment on retail fuel prices that have been static since March 16.

Oil companies have not changed rates despite a fall in international prices as they first adjusted them against the increase that was warranted from a Rs 3 per litre hike in excise duty and close to Re 1 per litre additional cost of switching over to cleaner BS-VI grade fuel from April 1.

Petrol in Delhi is priced at Rs 69.59 a litre and diesel comes for Rs 62.29 per litre.

"The negative price has no direct impact on India or Indian oil prices, as this has taken place due to crude oil produced and traded within the US. India's prices are driven partly by another benchmark, the Brent, which is still trading at USD 25/barrel. Therefore, the retail price of fuels in India are unlikely to fall," said Amit Bhandari, Fellow, Energy and Environment Studies, Gateway House.

Also, Indian refineries are already overflowing as fuel demand has evaporated due to the unprecedented nationwide lockdown imposed to curb spread of COVID-19. So, they can't rush to buy US crude.

The refineries have already cut operating rate to half because the fuel they produce has not been sold yet.

India imports 4 million barrels/day (1.4 billion barrels/year) of oil. The country has been benefitting from the falling prices of oil for the last five years, when oil dropped from a peak of USD 110/barrel to USD 50-60/barrel last year, enabling India to invest in public service programmes.

"However, the additional USD 30 fall of this week is good for India - but there is also a downside. If oil prices are too low, the economies of oil-rich gulf countries will be hurt, threatening the job prospects of the 8 million Indians working in the Gulf countries. India is the largest recipient of foreign remittances due to these workers – very low oil prices will hurt this cash stream," Bhandari said.

He said the negative price of oil shows how much oil oversupply exists in international markets today. "Global oil consumption has fallen due to the COVID-19 pandemic that traders are willing to pay customers to get rid of the barrels they can't store. The world does not have enough storage capacity, and dumping the oil is an environmental crime."

The first half of April saw Brent crude oil prices plummet 63.6 per cent to USD 26.9 per barrel. Prices of Western Texas Intermediate (WTI), the American oil, had also fallen similarly by 63.1 per cent.

But on April 20, WTI prices turned rapidly negative because traders on the Nymex exchange rushed to offload their May futures positions a day before expiry of contracts (on April 21).

Such WTI futures are traded on the Nymex exchange with contracts settled in physical crude oil. Problem is, those who had gone long are unable to find storage facilities for the oil and had to liquidate their contracts before expiry. This caused the plunge in WTI prices.

Contrast to this, June WTI Nymex futures prices is hovering around USD 21, while Brent for June delivery is at USD 25.

Miren Lodha, Director, CRISIL Research said the demand for crude oil was declining already because of economic slowdown when the COVID-19 pandemic-driven lockdowns crushed it further.

Consequently, oil demand is expected to contract by 8-10 million barrels per day (mbpd) in 2020 assuming demand recovery begins from the third quarter of the year, he said, adding if recovery doesn't happen by then, further demand destruction could occur.

On the supply side, producers reining in output following a strategic deal between OPEC members, Russia and the US.

Under this agreement, OPEC+ would reduce oil production by 9.7 mbpd for May and June, but gradually ease the curb to 7.7 mbpd between July and December 2020, and to 5.8 mbpd till April 2022 to stabilise prices.

"This is expected to reduce some surplus in the market by the end of 2020," Lodha said.

Crude oil demand is expected to decline by over 20 mbpd in April alone. Typically, monthly global demand is about 100 mbpd. Given this scenario, supply curbs would have limited influence.

Consequently, Brent oil prices is expected to be in the USD 25-30 range for the second quarter while increasing marginally in the last 2 quarters of 2020.

"The gigantic inventory build-ups and lack of storage facilities would also put pressure on prices," he said, adding overall Brent could average USD 30-35 in 2020, with a strong downward bias.

New Delhi, Jun 6: Bookings for select destinations in the USA, Canada, UK and Europe etc under Phase3 of Mission Vande Bharat opened at 5 pm on Friday, according to Air India.

"#FlyAI: Bookings for select destinations in USA, Canada, UK & Europe etc under Phase3 of #MissionVandeBharat opened at 5pm today. Around 60 million hits received till 7pm on our website & 1700 seats sold through website alone in 2 hrs. Bookings continue & tickets are being issued," the national carrier said in a tweet on Friday.

The third phase of the mission will begin from June 11 and continue till June 30.

Air India will operate five flights in the third phase of Vande Bharat Mission to evacuate almost 1,200 Indians nationals stranded in the United Kingdom between June 18 to June 23.

Air India will operate 70 flights in the third phase of Mission Vande Bharat to evacuate Indians stranded in the US and Canada between June 11 to June 30, Civil Aviation Minister Hardeep Singh Puri had said. 

Jaipur, Jul 18: BJP leader Laxmikant Bhardwaj filed a complaint against Congress leaders including Randeep Surjewala and Govind Singh Dotasra for associating Union Minister Gajendra Singh Shekhawat's name with an alleged audio clip related to "conspiring to topple" the elected government led by Chief Minister Ashok Gehlot in Rajasthan.

"Mahesh Joshi, Randeep Surjewala, and other accused have regularly been giving false and inflammatory statements against the BJP to criminally damage its reputation so that the blame for the current sorry state of affairs of the Congress can be pinned on the BJP. With the ill-intention of damaging the BJP''s reputation, a conspiracy was formed at the Chief Minister''s residence situated at 8 Civil lines," read the letter written by BJP Rajasthan spokesperson Bhardwaj to the Station Officer of Ashok Nagar police station read.

"From there (CM's residence) imitation of (voices) of people were falsely told to be of that of reputed leaders from the BJP and a fake phone conversation was created through which the false narrative of crores of rupees being offered to buy off Congress MLAs was created. The accused involved in this conspiracy have severely misused their position and power and the whole crime has been conducted by one named Lokesh Sharma, who calls himself an OSD of the Chief Minister," the letter further stated.

The complaint letter also said that Lokesh Sharma had "released three audio tapes to media workers on July 16, 2020, somewhere around 8:25 pm through WhatsApp so that the defamatory material can be circulated on a large scale to fulfill the criminal intent."

Mr Bhardwaj said that a news report in the Jaipur edition of a Hindi newspaper, published on July 17, 2020, had conveyed that the audiotape was released by Mr Sharma.

He further said that Congress leaders Randeep Surjewala, Govind Singh Dotasra, in a press conference held on Friday read out the conversation in the audio tapes publically and "using them as a basis accused the BJP of throttling democracy, sabotaging the mandate, and toppling the government."

Through this conspiracy, Mr Bhardwaj said that hateful and insulting comments are being made on the BJP and its supporters, and "on the basis of this the Special Operation Group (SOG) has filed fake lawsuits under Section 124A of the Indian Penal Code and is also threatening BJP leaders of arrest."

The BJP leader has urged the police officer to file a complaint against Mr Sharma, Mr Surjewala, Mr Dotasra, and others involved in the alleged conspiracy and take necessary action and recover the equipment used by them.

On June 17, Congress spokesperson Randeep Surjewala had accused Union Cabinet Minister Gajendra Singh Shekhawat and Congress legislator Bhanwarlal Sharma of conspiring to topple the elected government led by Chief Minister Ashok Gehlot in Rajasthan and subvert the voters' mandate.

"Yesterday, shocking tapes were aired by the media in which Union Minister Gajendra Singh Shekhawat, BJP leader Sanjay Jain and Congress MLA Bhanwar Lal Sharma spoke about bribing MLAs and bringing down Rajasthan government. Congress has suspended MLAs Bhanwar Lal Sharma and Vishvendra Singh from the primary membership of the party. The party has also issued show-cause notices to them," Mr Surjewala had said.

"We demand Rajasthan government and Special Operations Group (SOG) to register FIR and arrest the culprits as plenty of evidence has surfaced now," he had further stated.

Mr Surjewala had read out a transcript of an audio of alleged horse-trading between rebel MLAs and BJP, stating, "BJP has breached the trust of people. The audio clip reveals a horse-trading deal. This is a dark chapter in the history of democracy."

"This time the Narendra Modi government has challenged the wrong state," the Congress leader had said. He had alleged that the BJP has been "conspiring to topple Rajasthan government and buy legislators' allegiance."