| INDIAN AUTOMOBILE INDUSTRY | |
| INDUSTRY End of war in Sri Lanka revs up hopes of Indian auto makers INTERVIEWS/FEATURES New Maruti MUV to hit roads by Oct COMMERCIAL VEHICLES CONSTRUCTION & AGRI MACHINERY Bajaj begins bike production in China | ALLIED INDUSTRIES MRF workers continue agitation, arrested FINANCE & INSURANCE Decisive week for GM, Chrysler Magna, Fiat improve bids as Opel battle hots up ECONOMY & FINANCE
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| INDUSTRY Go To Top The Hindu Business Line (Web & Print Edition) See similar story in: Hindustan Times (Web Edition) (May 25) Thimphu: Nano is unlikely to hit Bhutan roads in the next couple of years as the government feels Tata's all-weather people's vehicle will increase the number of cars phenomenally in the country resulting in heavy traffic congestion and pollution. There are a worrying number of motor vehicles in the country, especially in the capital, according to Mr Tashi Norbu, Director, Road Safety and Transport Authority (RSTA). Vehicle buyers are aware that Nano, called the world's cheapest car, will increase the number of motor vehicles in the country. We're looking at a city for people and not a city for cars, Mr Norbu said. The RSTA figures show that there are about 40,000 vehicles in Bhutan, with Thimphu believed to have over 22,000 cars. The Prime Minister, Mr Jigme Y Thinley had recently said his government was in the process of weighing the pros and cons of allowing people to import Nano. Also Samden group and State Trading Corporation of Bhutan (STCBL), the two Tata dealers in the country, were planning to import the car but, with the huge local demand in India, they were asked to wait for another year or two for their share of the marke t. - PTI http://www.thehindubusinessline.com/blnus/14241610.htm http://www.hindustantimes.com/redir.aspx?ID=da3ba2dd-2a4a-4c05-acc5-715e9604caba END OF WAR IN SRI LANKA REVS UP HOPES OF INDIAN AUTO MAKERS Anupama Chandrasekaran mint (Web & Print Edition) (May 25) Chennai: Indian vehicle makers facing sluggish domestic and overseas demand, are peering at a conflict-free Sri Lanka for a sales boost. The recent escalation in conflict between the Sri Lankan army and the separatist Liberation Tigers of Tamil Eelam (LTTE) hurt exports of auto makers such as Ashok Leyland Ltd and Mahindra and Mahindra Ltd (M&M). On 18 May, the Sri Lankan authorities declared victory against LTTE in a war that spanned over a quarter of a century. I do expect the overall investment scenario for Sri Lanka to improve, said Nisha Taneja, professor at Indian Council for Research on International Economic Relations (Icrier), an autonomous think tank on economic policy. From an India perspective, I foresee further expansion of connectivity to the northern region. This will open up a completely new route, which will reduce transaction costs and provide a corridor for easy linkage. The auto industry has been riled globally by the economic slowdown. In India, sales of passenger and commercial vehicles slipped for the first time in seven years to 1.9 million in 2008-09, from two million the previous year, according to data from the Society of Indian Automobile Manufacturers. The countrys exports of such vehicles, though, climbed to 378,412 in fiscal 2009 from 277,395 earlier. Companies Mint spoke with, however, said exports to Sri Lanka fell in 2008-09. The strife-ridden nation has been a key export destination for Indian firms. Indias auto exports to Sri Lanka in 2007-08, before the tensions mounted, had risen to $249.19 million, at least five times the $45.27 million figure in 2001-02, according to the Federation of Indian Chambers of Commerce and Industry. M&M is already in talks with prospective dealers about starting a franchise in former LTTE strongholds. There had been some impact due to the conflict growing in recent months since we were not able to carry out our field activities aggressively, and also the impact was further aggravated due to the financial turmoil (global credit crisis), said Pravin Shah, executive vice-president of international operations for M&Ms automotive business, via email. M&Ms Sri Lanka sales volumes fell 23% to 850 vehicles in 2008-09. It expects demand to grow by 20-25% in the coming months in the nation for its utility vehicles and pick-up trucks. It will be ideally suited for these regions where the road infrastructure is not yet developed, Shah wrote. We are actually focusing more on making the after sales service and spare parts availability rather than just having showrooms We are sure of covering the region in next 6-8 months time. One of the worst-hit Indian vehicle makers in Sri Lanka has been Ashok Leyland. The Chennai-based firm saw Sri Lankas contribution to its exports crash to 15% in 2008-09 from 50% in past years, Ashok Leylands chief financial officer K. Sridharan told Mint over phone, blaming the conflict. The firms average annual sales of about 3,000 vehicles in Sri Lanka halved to fewer than 1,500 last fiscal, Sridharan said. The company claims it has traditionally been one of the biggest auto players in Sri Lanka with a 65% share. Icriers Taneja finds it hard to believe that companies whose businesses are focused largely around Colombo, have been hit by the recent complications. I dont think the escalation of the ethnic conflict affected trade between India and Sri Lanka, he says. One example is Maruti Suzuki India Ltd. Indias largest car maker claims to be unaffected by the heightened tensions between the Lankan government and Tamil rebels the past few months, though its exports to the country slipped. The car maker said it lost its 2006 market-leader status as demand for bigger cars jumped following a concessional duty scheme for Sri Lankan government employees. It expects demand in the nation of 20 million people to grow as construction of new roads, bridges and buildings takes off. Indian vehicle makers stand to gain as more trucks are employed to haul cement and machinery to aid infrastructure building, while better roads and better standard of living post war are expected to spur demand for passenger cars. Still, some observers see such outcomes to be hyped. I think rebuilding will be limited to certain pockets and there probably wont be large-scale rebuilding as was the case after the tsunami-hit Sri Lankan coasts a couple of years ago, said Mahantesh Sabarad, a senior auto analyst at Centrum Broking. http://www.livemint.com/2009/05/24231214/End-of-war-in-Sri-Lanka-revs-u.html | |
| INTERVIEWS/FEATURES Go To Top | |
| CARS, SUVs, MUVs Go To Top Chanchal Pal Chauhan The Economic Times (Web & Print Edition) (May 25) New Delhi: Maruti Suzuki, which sells every second car sold in India, is going to refresh its entire existing portfolio of older models in the next two years, a top company executive said.
By refreshing the portfolio Maruti will save on huge incremental costs that goes into developing new cars and platforms. As against the minimum cost of Rs 50-100 crore for upgrading a car, developing a new car could eat up investments of Rs 600-1,000 crore. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/Now-no-frills-Alto-to-take-on-Tata-Nano/articleshow/4573441.cms NEW MARUTI MUV TO HIT ROADS BY OCT Yahoo India (Web Edition) (May 25) The country's largest car maker Maruti Suzuki India Ltd is launching a new multi-utility vehicle (MUV) by October this year. The new car, to be built on the Versa platform, is expected to strengthen the company's portfolio in the van segment. The price is yet to be decided. The new car, codenamed O2, is currently at an advanced stage of design and would be produced at Maruti's plant near Delhi, according to sources. "We do not share our product plans in advance. We announce the same at an appropriate time," a company response said. The new car is expected to bolster Maruti's position in the combined people and luggage carrier segment. The segment grew to 10,708 in April 2009 from 8,816 in April 2008, according to the Society of Indian Automobile Manufacturers. The company launched the A-Star and the Ritz in the last few months, targeted at the urban driver. http://in.biz.yahoo.com/090524/32/batmfl.html The Hindu (Metro Plus) The Ritz is the eighth new model within 48 months after the launch of the Swift, Zen Estilo, SX4, Swift Diesel, Grand Vitara, Swift Dzire and A-star. The Ritz is Marutis practical and spacious alternative for those who dont quite fancy the Swift and find it too cramped. The Ritz is based on the Swift platform, but its taller (3.7 metres) and longer (1.7 metres) which will appeal more to families. Though the rectangular shape doesnt have the same style quotient of the Swift, it still manages to look smart and very urbane. The tall stance means that getting in and out of the car is a comfortable affair, thanks to the relatively wide and tall door apertures. The car will be available in three variants Lxi, VXi and ZXi with petrol engines and Ldi and Vdi with diesel engines. Step into the cabin and youll be instantly impressed with its airy feel. Theres an oval theme running across the interiors, ranging from the centre console through to the grains on the dashboard. The large speedometer is similar to that on the A-star and is surrounded by the warning lamps cluster. It also gets a digital fuel gauge, which isnt as convenient to read as a regular analogue gauge. Just like the A-star, you get a separate rev gauge bolted onto the dashboard (its on the left rather than to the right of the driver) and can be distracting at times. Its a clever interior as well. There are plenty of places to store your cellphone, coins, wallet and similarly sized items. The front passenger seat gets a tray under it a good place to put that book you just bought. Keeping costs low is the name of the game in the small car segment and Maruti seems to have done this with the Ritz, which shares its steering wheel, gear lever and power window switches with the Swift and SX4. The top-of-the-line ZXi variant comes with steering-mounted audio controls and integrated stereo though climate control (available on the Swift ZXi) is oddly missing. All controls are clear, logically placed and intuitive to use. The gear lever is housed in the centre console, just like rival i10, and is easy to operate. The drivers seat is height-adjustable on the top-end ZXi version. The front occupants get a good view of the road ahead, but the driver will find reversing a tricky proposition, thanks to the massive rear pillar. The Ritz passes the rear seat comfort test with ease. The wide seat has decent legroom and the tall design means headroom is unbelievably brilliant. The rear bench can accommodate three occupants with relative ease and the high-set seats shouldnt leave occupants tired, something that families will appreciate. Whats disappointing though is the boot which, at only 178 litres, is smaller than the Swifts 232 litres and good enough only for a couple of small bags. Not the ideal car for airport transfers. Build quality and general plastic quality, areas where Maruti hasnt been too strong in the past, seem to have improved as well and are better than the Swift. The cabin has generous splashes of colour and this adds to the cheerful feel about it. You get an all-new 1.2-litre, four-cylinder, 16-valve unit with a maximum power of 85 PS petrol engine which is Bharat Stage IV-compliant. This new 1197cc unit will be complemented by the tried-and- tested 1.3 Common Raol 16-valve diesel (DDiS) engine that delivers a maximum power of 75 PS. The new petrol feels far superior to the Swifts 1.3-litre engine in terms of refinement. It feels inherently quiet and only gets a little vocal at the end of its rev range. But, unlike the busy-sounding Swift engine, this motor feels relaxed. The 85bhp powerplant feels more than adequate for town use and doesnt mind being revved. Best power comes once its past the 4000rpm mark. However, being heavier than the Swift, the Ritz doesnt feel as quick as its sibling. Refinement levels of the Ritz diesel are similar to the Swift and theres little to suggest theres a diesel motor under the hood at cruising speeds. The gearboxes on both cars feel slick and are a joy to use; extracting power is an enjoyable affair. The Ritz may be built on the Swift platform but this car feels different to drive and isnt as exciting. The generous height means that body roll, though well under control, is evident. But there is decent grip from the tyres, which are similar to the Swift. The steering weights up nicely and gives good feedback. Ride quality is better than the Swift and the impact of most patchwork roads wont be felt inside the cabin. Ride comfort improves as speeds increase as well. On the highway, the car feels well planted and composed, even at speeds in excess of 100kph, and doesnt feel light like some other small cars. As an overall package, it is hard to find fault with the Ritz, save for the small boot. Its well-built, the cabin is spacious and smartly styled as well. We expect fuel efficiency levels to be similar, if not better, than the corresponding Swift diesel and petrol variants. At an expected starting price of Rs 4.10 lakh (ex-showroom, Delhi) for the petrol, the Ritz might be more expensive than the Swift but makes sense as a family car, thanks to its superior cabin space and build quality. Dont be surprised if the diesel version has a waiting period. http://www.hindu.com/mp/2009/05/25/stories/2009052550770300.htm | |
| COMMERCIAL VEHICLES Go To Top Priyanka Vyas The Hindu Business Line (Web & Print Edition) (May 24) New Delhi: Commercial vehicle majors are wary about the State governments meeting the deadline of procuring buses under the Jawaharlal Nehru National Urban Renewal Mission by the end of next month. Of the 14,400 buses that various State governments were to purchase as a part of the stimulus package announced in January, 7,800 units have been ordered so far. Even with the Central Government officials asking the state government officials concerned to speed up the process, several States are lagging behind. Industry officials feel there could be a time lag of five months before actual deliveries could start taking place. Till now, States such as Andhra Pradesh, Karnataka, Kerala, Maharashtra and West Bengal have finalised contracts. Several others are still in the process of issuing bids and finalising tenders. There was a meeting with the State government officials on May 18 to monitor the scheme and expedite the process, said an official in the Ministry of the Urban Development. Lead time According to Mr Prakash Telang, Executive Director (commercial vehicles), Tata Motors, There is usually a lead time of five months for the buses to be delivered. Since all the state governments are yet to place orders, we expect a delay in supplies. Industry officials cite that the lead time of five-six months in delivery is mainly because the specifications required by the State government for these city buses is different from the existing fleet. The market size of buses for the fiscal ended 2008-09 stood at about 34,915 units, a 9 per cent drop from the previous fiscal. This means that the buses purchased under the programme will be slightly less than half of the domestic bus sales for last fiscal. An official with another commercial vehicle producer said, Orders are still happening with State governments at various stages of issuing tenders. We dont see the process being completed as per the deadline. http://www.thehindubusinessline.com/2009/05/24/stories/2009052450610200.htm | |
| CONSTRUCTION & AGRI MACHINERY Go To Top | |
| 2/3 WHEELERS Go To Top Hindustan Times New Delhi: In a major strategic U-turn, countrys second largest two wheeler manufacturer Bajaj Auto Ltd has decided to re-enter the 100cc motorcycle segment a category it had decided to exit only two years back. The company has announced that it will launch a new offering in the 100cc segment later this year, in a tacit admission that its bid to help the market graduate to higher engine specification bikes has failed to pay dividends. This comes barely six months after it launched a 125 cc variant of Platina, which had raised hopes of a discontinuation of the 100cc variant in the near future. We are looking at numbers above 20,000 units per month for this motorcycle, said Rajiv Bajaj, managing director, BAL. Though the company did not specify any reasons for this volte face, numbers have their own story to tell. In the last two fiscal, Bajajs sales in the 100cc segment have witnessed a free fall which has been duly exploited by market leader Hero Honda. In 2007-08, which was one of the worst years for the two wheeler industry in recent times, Bajajs overall sales declined 20 per cent to 16.79 lakh bikes. During the same period, Hero Honda witnessed a flat year with overall sales registering a 0.23 per cent growth. To expect the 100cc segment to dissolve overnight and for consumers to reject Hero Honda bikes altogether was a little over the top, no matter how aggressively you price your own products. This is a diversified market and to capture it, you have to be equally focused in all segments at all points of time, said an industry analyst. BAJAJ BEGINS BIKE PRODUCTION IN CHINA PTI See this story in: The Hindu Business Line, mint, Business Standard, The Statesman, The Economic Times (May 25) Mumbai: Two-wheeler maker Bajaj Auto has begun production of its bikes in China for exports to Nigeria, a potential market for low-cost and unbranded bikes. Earlier this month, we began production in China and have shipped 1,000 made-in-China bikes to Nigeria through India, Bajaj Auto Managing Director, Mr Rajiv Bajaj said at an analyst conference recently. Nigeria is believed to be a big market for unbranded bikes priced between $300 and $400. The Chinese are selling their bikes in the Nigerian market with a price range of $300-400. The company is targeting the unbranded segment in Nigeria. It has named its bike Boxer and it would not carry the Bajaj name. Bajaj, in association with Kawasaki, was making the bike Boxer, which it discontinued in 2004. Bajaj did not give the price of Boxer. However, the market size of bikes in Nigeria has shrunk owing to the global economic slowdown, Mr Bajaj said. In future, Bajaj would look at integrating the operations in India and China paving way for the launch of Boxer in India, he said. By the end of this fiscal, the Chinese factory would make 10,000 bikes per month, he added. http://www.thehindubusinessline.com/blnus/02241612.htm http://www.livemint.com/2009/05/24184147/Bajaj-begins-bike-production-i.html http://www.business-standard.com/india/news/bajaj-begins-bike-production-in-china/62664/on http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=255680 | |
| COMPONENTS Go To Top Piyush Pandey & Sachin Dave The Economic Times (May 25) Mumbai: Leading automobile manufacturers are developing engines that run on compressed natural gas (CNG) as the availability of natural gas is expected to double by this year-end. The supply of natural gas is likely to go up to 200 mmscmd by this year with 80 mmscmd flowing from Reliance Industries Krishna Godavari basin.
Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/CNG-run-engines-on-the-cards/articleshow/4573464.cms R.Y. Narayanan The Hindu Business Line (May 24) Coimbatore: The Coimbatore-based Shanthi Gears Ltd (SGL), which makes industrial gears, textile products and CNC machine tools, has embarked on an exercise to rationalise manufacturing facilities under which the number of production facilities would be brought down to two from six. The company believes that the move would help it enhance productivity and bring down cost and consumption of raw materials. But the move is not expected to lead to any rationalisation of the workforce and the whole process will be completed during the current quarter. The employee attrition the company has been witnessing is a normal process and the companys promoters have no intention of exiting from the company, according to SGL sources. Slowdown in production In a communication to the NSE recently, SGL said that it is in the process of revamping and restructuring the entire operational and organisational structure. This may lead to slowdown in production in all units for a short tenure. Company sources told Business Line that even a couple of years ago the company had planned to have only two units instead of six and wanted to retain plants at Muthugoundanpudur and Kannampalayam. The idea was to shift the plant and machinery from the other four manufacturing facilities to these two units and utilise the vacant buildings for office purposes or design and development activities. They said the company wanted to utilise the current slowdown in industrial activity to implement the earlier plan. They said since the company wanted to execute its plans for rationalising the operations at one go, it decided to slow down production. He said the revamp plan is not expected to result in any reduction in the work force. On the impact of the companys plans on the suppliers and whether they would be hit, he said there could be some delay in their case. Higher productivity Asked about the benefit of the revamp exercise to the company, the source said that this would help the company get higher productivity and consumption of raw materials would come down, which would help improve the bottomline. In the first nine months of 2008-09 FY, SGLs net income was Rs 183. 4 crore (Rs 176.3 crore) and net profit Rs 30.13 crore (Rs 32.27 crore). The EPS (share face value Re 1) for the period was Rs 3.69 (Rs 3.97). http://www.thehindubusinessline.com/2009/05/24/stories/2009052450650200.htm | |
| ALLIED INDUSTRY Go To Top S Kalyana Ramanathan Business Standard (May 24) London: Apollo Tyres, post its acquisition of Dutch tyre maker Vredestein Banden BV, is now keen to take its manufacturing footprint into the Asean (Association of South East Asian Nations) region. After enjoying the status of a significant tyre maker in India for over 30 years, the company now wishes to move into the global league to be among the top 10 tyre makers in the world in the next five years. The companys 38-year old Vice-Chairman and Joint Managing Director Neeraj Kanwar says that, given the intrinsic bulkiness of a product like automotive tyres, manufacturers like Apollo, who are keen on a global presence, will have to set up manufacturing bases in important markets. Three years ago, Apollo made its first foreign acquisition by buying Dunlops South African operations. Last week, the company completed the acquisition of Vredestein Banden for an undisclosed sum. On a consolidated basis, the groups turnover now stands at around $1.5-1.6 billion, making it the largest tyre company from India. The Dutch acquisition, with a top line contribution of nearly $425 million (Rs 2,000 crore), accounts for a fourth of this. With its current operations in India, Africa and Western Europe, the group hopes to cross $2 billion (nearly Rs 10,000 crore) in turnover by March 2011, says Kanwar. It took us 30 years to cross the first billion-dollar mark in sales. The next should come in just about three years, he adds. Now with Europe and Africa being part of its global presence, the next move will be either in China or relatively smaller Asean countries. Exports cannot be more than 30 per cent from any location. Without a strong domestic demand, we will not buy or set up greenfield projects anywhere, says Kanwar. Within Asean itself, Thailand, Philippines and Indonesia count as prominent targets for the company, says an insider. While the company continues to expand its global presence, its Indian operations are also fast reaching a critical stage. The new plant in Chennai, in which the company will be completing its first phase of expansion by November 2009 and second phase by September 2009, will have a capacity to make 100,000 truck and bus radial (TBR) tyres and 7.5 lakh passenger car radial (PCR) tyres a month, making this plant the companys largest plant in the country. In all, the company will be investing close to Rs 1,600 crore in this new plant. Three years after acquiring Dunlop South Africa, Apollo will make its first major expansion there with an investment of $40-50 million (around Rs 190-240 crore) over the next 16 to 18 months, which will double its capacity to make TBR to 1,400 tyres per day and a 25 per cent increase in PCR to 12,500 tyres a day. Kanwar says that integrating the three operations (India, Africa and Western Europe) will be the next big challenge. Apart from accessto lucrative markets, technology, brands and R&D capabilities have been strong reasons for acquisitions outside India. The 90-member R&D team in Vredestein Banden can play a pivotal role for product development strategy for the entire Apollo group in the coming years. Members from the group in India will meet their new Dutch colleagues in the first week of June to discuss the road map for this integration work. Integration of technology, along with what to sell to which market and at what price will be discussed, says Kanwar. Even traditional critics of the tyre industry in India, like S P Singh, the convenor of the All-India Tyre Dealers Association, agree that the only way Indian tyre makers can access technology to make safety-regulated products is by acquiring companies outside India. This is the best way to access European markets, which have very stringent safety standards, says Singh. Despite its global plans, the most difficult challenge for the company is, however, from its operation that is closest to home. The plant in Kalamassery in Kerala (Apollo has its registered office in Kerala), which makes technologically outdated cross-ply tyres, has reached a point where it cannot be expanded. The company wishes to move this plant to Irapuram (also in Kerala) that is 40 kms from its Kalamassery plant. This move has been opposed by the union. At 80 tonnes a year output, the plant is not profitable on a standalone basis. Unless we can take that to 200 tonnes, it will not be profitable, says Kanwar. If and when the union agrees, it will be the next big expansion for Apollo Tyres in India after the new plant in Chennai goes into commercial production. http://www.business-standard.com/india/storypage.php?autono=358974 MRF WORKERS CONTINUE AGITATION, ARRESTED The Hindu Business Line (May 24) Chennai: Over 650 MRF employees and their family members demonstrating in front of the Labour Department office complex were arrested on Saturday. According to Mr V. Prakash, Honorary President of the MRF United Workers Union, the workers from MRFs Arakkonam unit demanding management recognition of the union were released in the evening. They dispersed after State Government officials assured them that the Vellore District Collector would mediate a meeting between the union and the management in the presence of Labour Department officials on Monday. According to police officials the arrested included over 500 employees of MRFs Arakkonam unit and the rest were family members who had participated in the demonstration. Lock-Out The workers have been on a strike for over two weeks pressing their demand. They had been on a sit-in strike for over two weeks at the Arakkonam facility and were evicted by the police from the factory premises in Arakkonam on Wednesday after the company declared a lock-out. The workers and their supporters gathered in front of the Labour Department office in Chennai on Friday morning and represented the issue to the officials, and continued their demonstration till they were arrested this morning. According to the union leaders, the employees were committed to the agitation and would not give up unless the management recognises the union and initiates wage settlement discussions with them. They were also willing to face an election through a secret ballot to prove their majority, they said. However, the management has said that it recognises the MRF Arakkonam Workers Welfare Union, with which it has arrived at a wage settlement. http://www.thehindubusinessline.com/2009/05/24/stories/2009052451140300.htm | |
| FINANCE & INSURANCE Go To Top | |
| LUBRICANTS & ALTERNATIVE FUELS Go To Top PTI See this story in: Business Standard (May 24) New Delhi: The government will consider deregulating petrol and diesel prices, as also increasing rates of natural gas sold by state firms, said Murli Deora, who is likely to start a second term as petroleum minister. Separate draft Cabinet notes are ready for giving public sector Indian Oil, Bharat Petroleum and Hindustan Petroleum freedom to fix petrol and diesel prices when crude oil prices are below $75 a barrel and raising rates of natural gas produced by Oil and Natural Gas Corp (ONGC) and Oil India Ltd from nominated fields. Deora, the outgoing petroleum minister, has been renominated to the Union Cabinet and is mostly likely to retain his ministry, breaking the jinx that no one oil minister has served a second term in the country. No one has ever completed a full five year term as petroleum minister and none have ever been repeated. BJPs Ram Naik is the longest serving oil minister, surviving at Shastri Bhavan for a good four-and-half years from end-1999. First, my portfolio has not been decided. Prime minister has not told me anything, Deora said before leaving for taking the oath. He, however, said issues of deregulation of petrol and diesel prices would very much be on agenda for the new government. We insulated the consumers when international crude oil prices touched $147 per barrel last year. Our attempt has been to make available fuel to common man at affordable price, Deora said. The fall in crude oil prices has, however, presented an opportunity to free the auto fuel prices that were brought under government control in 2004 after being free for almost two years. My personal opinion is that it is the right time to free petrol and diesel prices. But poor should continue to get cooking fuel like kerosene at subsidised rates, he said. Nowhere in the world is kerosene sold at Rs 9 per litre... It is cheaper than even mineral water. Deora, 72, has been instrumental in bringing about some structural reforms driving state firms to their core competence rather than diversifying businesses. He earned the wrath of reformists when he stonewalled attempts to allow skyrocketing oil prices to be passed on to consumers. The Draft Cabinet note on Decontrol of Price of Sensitive Products suggests a move to market-determined pricing when crude oil prices are below $75 a barrel. At these levels, state-run oil retailing firms would compete to fix consumer price. In the event crude oil crosses the $75 a barrel mark, the government would intervene in the market to lessen the burden on the common man through a sharing of the revenue losses of retailers between the national treasury and upstream oil and gas companies. Currently, the government controls on the prices of automobile and cooking fuels force state-run refiners to sell oil products below cost and the losses are partly borne by exploration companies. Also on agenda will be increasing price of gas that ONGC produces from fields given to it on nomination basis. ONGC currently gets about $2 per million British thermal unit while gas from fields operated by BG is sold at $5.70 per mmBtu. Also, explorers may get a seven-year tax break on income from gas produced at new fields to help boost investment. India had last month postponed its largest auction of exploration blocks on concerns that the lack of such a tax break would discourage domestic and overseas companies from bidding. http://www.business-standard.com/india/news/govt-to-consider-deregulating-fuel-prices-deora/358952/
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| INTERNATIONAL NEWS Go To Top AFP See this story in: The Times of India (May 24) Washington: President Barack Obama said on Saturday he hopes General Motors and Chrysler emerge "leaner, meaner, more competitive" when the US economy recovers, but he steered clear of mentioning a possible GM bankruptcy. DECISIVE WEEK FOR GM, CHRYSLER Agencies See this story in: The Economic Times (May 25) Washington: The US auto industry faces a tumultuous week that could see sector leader General Motors forced into bankruptcy and number three maker Chrysler move toward a quick exit from court protection. MAGNA, FIAT IMPROVE BIDS AS OPEL BATTLE HOTS UP Reuters See this story in: The Economic Times (May 25) Frankfurt/Berlin: Magna International and Fiat have improved their offers for General Motors unit Opel ahead of a crucial week in which the German government is expected to decide which bid it backs. http://economictimes.indiatimes.com/News/International-Business/Magna-Fiat-improve-bids-as-Opel-battle-hots-up/articleshow/4573521.cms | |
| ECONOMY & FINANCE Go To Top See this story in: The Pioneer (May 25) Mumbai: With a stable and pro-economic reform Government in place, economists on Sunday said the Centre needs to boost infrastructure and focus on disinvestment to alleviate fiscal stress in the system. | |
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