Govt may give gas subsidy to power, fertiliser sectors

June 29, 2013

Govt_gas_subsidyNew Delhi: Jun 29: The government is considering giving natural gas to power and fertiliser sectors at reduced cost to help them cope with the two-fold increase in gas prices effective from April next year.

The move is expected to increase the country’s annual subsidy burden by $1 billion, contrary to the efforts being made over the past few years to phase out subsidies.

But the government says that revenue from exploration companies by way of royalty, taxes and profits, estimated at $500 million, will take care of the subsidy burden to a great extent.

“We will be getting more than $500 million by way of taxes and profit. Increase in prices was necessary as our own upstream regulator, the Director General of Hydrocarbons (DGH), had branded several discoveries made in deep sea as economically unviable for development at the existing $4.2 per million metric British thermal unit (mmBtu) price,” Petroleum Minister Veerappa Moily said.

“The power and fertiliser ministries have raised the issue. We can look at fixing the input costs for these sectors. The issues will be addressed in course of time,” Finance Minister P Chidambaram told reporters here.

A decision on gas price hike has come for the first time in three years after the sector suffered from lacklustre foreign investment. Domestic companies, too, did not show much interest in oil and gas exploration, owing to low output cost.

No investments

Chidambaram said no investment was coming to India in the oil and gas field. “While investment in India has declined from $6.3 billion in 2008-09 to $1.8 billion in 2012-13, Indian promoters are investing abroad, with $27 billion having flowed out in the last 10 years, and another $10 billion in pipeline,” he said.

“The only way to correct this is to give investors a reasonable price which will attract them to invest here, so that we can increase our domestic production,” he added.

The minister also said that importing gas raised its price to above $13 per mmBtu.

He also said the difference between imported and domestic production even after the two-fold increase in prices would be more than $4.50 per mmBtu.

“Gas importers will make a profit even after the hike,” he said.

The increase in gas price was opposed by the power and fertiliser ministries as it would lead to a higher cost of generating electricity.

Power cost

The power production cost could go up to Rs 6.40 per unit from the current Rs 2.93, they contended.

Chidambaram also rejected suggestions that the gas price hike decision was taken to benefit the private sector.

“We are not being influenced by anyone. If at all we are being influenced, we are influenced by the condition of the economy. Our current economic condition demands that we produce more gas,” he said.

While industry players and India Inc hailed the move, the Fertiliser Association of India (FAI) criticised it, saying that it will raise the government’s subsidy burden by Rs 11,000 crore per annum if urea prices were not corrected in tandem.

FAI Director General Satish Chander rued that the fertiliser industry is already not getting its subsidies in time.

Among upstream oil companies, the ONGC said it expected to add about Rs 8,000 crore in profits annually through the hike in gas prices, while Oil India said it would add Rs 1,000 crore of extra profit through increase.

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News Network
April 25,2020

New Delhi, Apr 25: With 1,429 more COVID-19 cases reported in the last 24 hours, India's count of coronavirus cases has reached 24,506, said Ministry of Health and Family Welfare on Friday.

Out of these, 18,668 patients are active cases and 5063 cases have been cured, discharged, or migrated.

The death toll stands at 775, with as many as 57 deaths reported in the last 24 hours.

According to the morning update by the ministry, Maharashtra continues to be the worst-hit State with 6,817 cases of which 840 patients have recovered and 301 patients have died.

Gujarat now stands in the second spot with 2,815 cases, of which 265 have recovered and 127 people have died. Meanwhile, Delhi's count stands at 2,514 of which 857 patients have recovered, while 53 patients have lost their lives.

Tamil Nadu's COVID-19 figure stands at 1,755 with 866 patients recovered and 22 fatalities. Rajasthan has reported 2,034 cases of which 230 have recovered and 27 patients are dead.

Madhya Pradesh has reported 1,852 positive cases so far of which 210 patients have recovered and 92 patients have lost their lives due to the virus. In Uttar Pradesh, as many as 1,621 people have confirmed COVID-19, of which 247 recovered and 25 people have succumbed to it.

In Kerala, which reported the country's first COVID-19 case, 450 people have been detected positive for coronavirus.

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Agencies
January 23,2020

Jammu, Jan 23: The National Investigation Agency (NIA) has brought the disgraced Deputy Superintendent of Police (DSP) Davinder Singh to Jammu for investigations.

According to sources, Davinder Singh has been brought on a transit remand. A formal remand from the NIA court for interrogation will be taken on Thursday.

On Wednesday, fresh raids were carried out by the NIA at Singh's residences in Srinagar.

Singh was caught while transporting two militants, Naveed Babu and Rafi Ahmed, and a lawyer Irfan Ahmed in a vehicle to Jammu on January 11.

According to sources the two militants and the lawyer had plans to travel to Pakistan after reaching Jammu.

The case was transferred to the NIA after initial investigation by the Jammu and Kashmir Police.

Singh has been dismissed from the service and the Jammu and Kashmir administration on Monday forfeited the commendation medal and certificate awarded to him.

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News Network
February 14,2020

New Delhi/Washington, Feb 14: India has offered to partially open up its poultry and dairy markets in a bid for a limited trade deal during US President Donald Trump's first official visit to the country this month, people familiar with the protracted talks say.

India, the world's largest milk-producing nation, has traditionally restricted dairy imports to protect the livelihoods of 80 million rural households involved in the industry.

But Prime Minister Narendra Modi is trying to pull all the stops for the US President's February 24-25 visit, aimed at rebuilding bonds between the world's largest democracies.

In 2019, President Trump suspended India's special trade designation that dated back to 1970s, after PM Modi put price caps on medical devices, such as cardiac stents and knee implants, and introduced new data localization requirements and e-commerce restrictions.

President Trump's trip to India has raised hopes that he would restore some of the country's US trade preferences, in exchange for tariff reductions and other concessions.

The United States is India's second-largest trade partner after China, and bilateral goods and services trade climbed to a record $142.6 billion in 2018. The United States had a $23.2 billion goods trade deficit in 2019 with India, its 9th largest trading partner in goods.

India has offered to allow imports of US chicken legs, turkey and produce such as blueberries and cherries, government sources said, and has offered to cut tariffs on chicken legs from 100 per cent to 25 per cent. US negotiators want that tariff cut to 10 per cent. The Modi government is also offering to allow some access to India's dairy market, but with a 5 per cent tariff and quotas, the sources said. But dairy imports would need a certificate they are not derived from animals that have consumed feeds that include internal organs, blood meal or tissues of ruminants.

New Delhi has also offered to lower its 50 per cent tariffs on very large motorcycles made by Harley-Davidson, a tax that was a particular irritant for President Trump, who has labelled India the "tariff king." The change would be largely symbolic because few such motorcycles are sold in India.

President Trump will be feted in PM Modi's home state of Gujarat, then hold talks in New Delhi and attend a reception that the hosts have promised will be bigger than the one organised for former president Barack Obama in 2015.

But it is far from clear whether India's offers will be enough to satisfy US Trade Representative Robert Lighthizer, who cancelled plans for a trip to India this week. Instead, he has held telephone talks with Commerce Minister Piyush Goyal.

The US dairy industry remained sceptical on Thursday that a viable deal is at hand.

"We're always looking for market access, but in terms of India, as of today I'm not aware of any real progress going on," said Michael Dykes, president of the International Dairy Foods Association and a member of USTR's agricultural trade policy advisory committee.

Mr Dykes said the US dairy industry was looking for access in viable commercial quantities.

A USTR spokesman and India's trade ministry did not respond to requests for comment.

A parliament panel is reviewing a draft data privacy law that imposes stringent controls over cross-border data flows and gives the government powers to seek user data from companies.

It is not clear whether it will be passed, or in what form, but the possibilities have unnerved US companies and could raise compliance requirements for Google, Amazon.com Inc, and Facebook.

The draft law is not part of the trade discussions, Indian officials say, because the issue is too difficult to resolve at the same time.

"The privacy and localization piece will be raised independently and in concert with the trade discussions," said a Washington-based source with knowledge of the US administration's thinking.

President Trump on Tuesday was non-committal about sealing a trade deal before his visit. "If we can make the right deal, we'll do it," he told reporters.

Two US sources said progress had been made on proposed alterations to the medical device price caps. India's new import tariffs on medical devices, walnuts, toys, electronics and other products on February 1 surprised US negotiators, however.

The new tariffs were aimed at China, which also makes medical devices, according to an Indian government source. "We have to protect our market and our companies," the source said.

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