The Oil and Natural Gas Corporation will pay Rs 852 crore (Rs 8.52 billion) for subsidising petrol and diesel during January-March quarter but state gas utility GAIL India has been spared from the subsidy burden.
Reliance Industries and Essar Oil are keen on buying crude oil from Cairn India's Rajasthan fields even as the petroleum ministry struggles to find takers of the nation's most prolific oil discovery among public sector firms.
The decision comes after Australian mining major BHP Billiton said it would not improve the terms of its bid. BHP Billiton, the largest mining company in the world, and new entrant GVK Oil and Gas were the sole bidders for five deepwater blocks and hence the provisional winners after the bidding closed on June 30 this year.
As crude oil prices hover around four-year lows, the government may look at slashing diesel prices further that will help cool inflation by lowering goods transportation charges.
With international crude oil prices dipping to last year's levels, the government has put the issue of cutting motor and cooking fuel prices back on the agenda to tame inflation, two senior oil ministry officials have said.
Oil ministry officials say it is unlikely that the government will accept the BK Chaturvedi Committee's recommendation for raising the retail prices of petrol and diesel as it faces general elections in less than a year. The move also risks putting pressure on inflation, which has already crossed a 13-year high.
Labayendu Mansingh, Chairman of the Petroleum and Natural Gas Regulatory Board, is an amicable yet tough man. In his 5 months as the petroleum & natural gas regulator, Mansingh announced to the oil & gas industry his intention of proving that the regulatory board is more than a toothless tiger. The board will come out with its first set of regulations, which will lay down rules for the distribution of gas to households, vehicles & industries in cities by middle of this month.
Days after the Cabinet approved doubling of natural gas price from April next year, the Finance Ministry has written to Oil Ministry suggesting setting of a ceiling or an upper limit for the rates.
RP Singh, managing director of Bharat Oman Refineries Ltd, the special purpose vehicle implementing BPCL Bina refinery, had told Business Standard in August that the company was in talks with strategic investors to sell 15 to 20 per cent stake.
As per the 15-day billing cycle, gas producers are to raise the first invoice at the revised price of $5.61 per million British thermal unit this weekend.
The government had in May last year disallowed $1.005 billion expense of RIL on the flagging KG-D6 gas fields for not implementing the approved field development plan.
CAG had in its previous reports slammed Oil Ministry and its technical arm DGH for not exercising enough control and vigil over KG-D6 block.
Dudley, whose company last year made the largest foreign direct investment in the oil sector, followed it up with a meeting with Finance Minister P Chidambaram.
Cheaper crude oil weakens rupee even as core sector growth revives
GAIL has already been appointed as the nodal agency for the pipeline in India.
The government is set to dump B K Chaturvedi panel's recommendation for a monthly increase in fuel prices till they are at par with costs, but may accept the high-powered committee's suggestions for imposing a tax on oil produced from fields awarded before 1999.
The government allows the oil companies to sell only a quarter of the total quantum of bonds they hold at any time during a quarter, so as to ensure that the market is not flooded with oil bonds. It has not yet decided on how the subsidy burden will be shared across stakeholders, how much of the subsidy from the government account will be given in cash and how much in the form of bonds, says an official.
Petrol and diesel are among the 90-plus commodities that have been approved by the government for derivatives trading
Petrol, that had in April/May witnessed 11-12 per cent growth in consumption, in fact saw a six per cent fall in demand at 8,02,500 tons in June, oil ministry officials said.
The Oil Ministry has fixed the subsidy payout by upstream firms like Oil and Natural Gas Corporation and Oil India Ltd at Rs 15,546.65 crore (Rs 155.46 billion) for the April-June quarter.
RIL on Monday submitted a commerciality report for the Dhirubhai-39 discovery in block KG-DWN-2003/1, about 50 km off Machilipatnam in Andhra Pradesh, to the oil ministry and the directorate general of hydrocarbons. A company official said the well KG-V-D3-A1 flowed 38.1 million cubic feet per day of gas and the find was later named Dhirubhai-39.
India's fuel demand in September rose at the fastest pace in more than a decade.
New Delhi has missed its target for partial privatisations for the past five years
India expects to remain unscathed this time, mainly because it is in a sweet spot as the world's third largest oil consumer, after the US and China, says Subhomoy Bhattacharjee.
'We began foolishly bragging about Saudi-Emirati investment plans as indicative of the sheikhs 'distancing' from Pakistan, including on Kashmir,' notes Ambassador M K Bhadrakumar.
The government had in October 2007 set a sale price of $4.20 per million British thermal unit based on the price discovered by RIL from key customers.
The government is likely to make it mandatory for natural gas producers to auction the fuel to consumers within a fixed price band instead of the present practice of entering into negotiated deals.
RIL may go to arbitration which may lead to further delay in production and extra cost associated with the arbitration.
A Committee of Secretaries will meet on July 6 to discuss pricing of natural gas to be produced from Reliance Industries' block off the east coast and whether the Centre should take its share in cash or kind.
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The Oil Ministry on October 31 issued orders asking upstream oil and gas producers like ONGC and Oil India Ltd to give Rs 16,729.74 crore (Rs 167.29 billion) to make up for 47 per cent of the Rs 35,328-crore (Rs 353.28 billion) revenue that retailers lost on selling diesel, domestic LPG and kerosene at government controlled rates in second quarter.
RIL had challenged the government notice to disallow cost through a Notice of Arbitration on November 23, 2011 saying the signed contract does not provide for output targets and there was no provision for disallowing any part of cost because of production not being in line with output guidance.
Sehgal has said that Natwar Singh introduced him to Iraqi officials.
Oil and Natural Gas Corporation has blamed oil regulator V K Sibal of causing a crash in the company's shares by publicly rejecting a gas discovery contrary to upholding private sector claims in identical circumstances.
The Directorate General of Hydrocarbons last month recommended to the Oil Ministry that $792 million of the cost RIL has incurred in KG-D6 fields be disallowed for producing only an average of 26.07 million cubic meters per day of gas as against the target of 86.73 mmcmd in 2012-13.
The post fell vacant after the government refused Subir Raha an extension at the helm of the company after his first five-year term expired in May.\n\n
Govt plans to stop RIL from selling crude to Jamnagar refinery.
L N Mittal's foray into oil and gas trading business through a joint venture with ONGC is facing fresh opposition from refiner Indian Oil Corp, which feels the JV is ineligible to bid for its tenders.
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