Ujjwala leads to 40 mn new LPG connections with a jump of 45% in FY19

The rising number of Ujjwala customers is, however, increasing the government’s subsidy burden

Economy News: The push for clean energy through the Pradhan Mantri Ujjwala Yojana (PMUY) has led to a record 40.7 million new liquefied petroleum gas (LPG) connections being added in the current fiscal year (2018-19, or FY19). This is a jump of 45 per cent over 2017-18 (FY18). The three oil marketing companies — Indian Oil Corporation (IOC), Bharat Petroleum Corporation, and Hindustan Petroleum Corporation (HPCL) — have together set a target of adding 42.5 million customers by the end of March 31.

The rising number of Ujjwala Yojana customers is, however, increasing the government’s subsidy burden. The LPG subsidy during the first nine months of the current fiscal year has already crossed the last year’s mark by 23 per cent.

The government shelled out Rs 25,700-crore subsidy during April-December 2018, compared to Rs 20,880 crore during the whole of FY18. The Budget for 2019-20 had, however, provided only Rs 20,283 crore in the Revised Estimates for FY19. The government expects the LPG subsidy to rise 62 per cent to Rs 32,989 crore next year. A part of this is expected to be rolled over from the current year…

Ujjwala scheme to get Rs 293-cr publicity push from BJP ad brain: Sources

Delhi-based US Advertising Agency to undertake Rs 293-crore campaign

Economy News: With the election season round the corner, public sector undertakings (PSUs) seem to be on an advertising spree. The biggest campaign valued at Rs 293 crore and tendered by Indian Oil Corporation (IOC), will be undertaken by Delhi-based US Advertising Agency.

The agency, on the website, says that the ruling BJP is among its top clients. The tender involves outdoor campaign that highlights the success of the Pradhan Mantri Ujjwala Yojana (PMUY).

According to sources, the IOC tender is considered to be huge for a single scheme since the total budget for campaigns run by the government’s Directorate of Advertising and Visual Publicity on an annual basis is only around Rs 150-200 crore. According to an industry source, other companies in the fray for the IOC tender were Mumbai-based Laqshya Media Group and Signpost India.

Under the tender, the winning agency would come up with outdoor campaigns in Karnataka, Gujarat and Odisha and Mumbai and Delhi along with 26 airports across the country. “We are being awarded the IOC contract. The government’s idea is that if you are performing on some parameters, it is your duty to inform the public. This campaign is to inform the public about the success of Ujjwala,” Amit Kapoor, managing director, US Advertising, 

The major clients of the firm, that was set up in 2000 and turned into a private limited company in August 2014, include Flipkart, Sony, Nissan, Hindustan Petroleum Corporation, Gail India and BP….

Contain Source ByBusiness Standard

Can't keep changing fuel prices on knee-jerk basis: Pradhan

Said shifting to GST regime will be the only way to have a transparent tax structure on fuel items

Share prices of the three government-owned oil marketing companies (OMCs) fell on Wednesday on pricing worries, which the government later said were baseless.

Reports suggested the three -- Bharat Petroleum Corporation (BPC), Hindustan Petroleum Corporation (HPC) and Indian Oil Corporation (IOC) -- might be asked to absorb the recent global hike in crude oil prices. As a result, their share prices fell 6.2%, 5.1% and 4.3%, respectively, on the BSE exchange.

The markets were worried on whether the government was going back to the regulated pricing era. However, after trading hours, petroleum minister Dharmendra Pradhan said the government would not ask state-run companies to absorb the price rise in petrol and diesel and would stay to market-driven pricing.

He added that a shift to the goods and services tax (GST) regime was the only way to have a transparent tax structure on fuel items.

"The government has no business to interfere in the day-to-day affairs of companies. We have linked product prices to the market and will stick to that," said Pradhan. The minister added that global prices would ease very soon.

"A knee-jerk reaction is not required when we are following a formula. We expect prices to come down soon. This increase is mainly because of the cyclones that hit the US, which resulted in a decline of refining capacity by 13% and an increase in diesel prices by 20% and petrol by 18% in the past three months," he added....READ MORE

Daily fuel prices rolled out, but dealers unhappy, shut shop in Karnataka

At least 1000 petrol pumps across 7 districts in Karnataka has shut shop protesting against the move

On a day when state-run oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) launched the daily revision of fuel prices, at least 1000 petrol pumps across seven districts in Karnataka have shut shop protesting against the move.

This comes after fuel dealer associations called off their plan to go for “no purchase” of fuel following intervention from Petroleum Minister Dharmendra Pradhan. “The move will wipe out the entire margins of marginal dealers. While oil marketing companies claim that 95 per cent of retail outlets are automated, only 5 per cent are automated. At least 1000 petrol pumps are shut down in seven districts of Karnataka with no purchase and no sale, while some outlets in Bangalore too have opted to go for no purchase,” said Ranjith Hegde, secretary of Mysore Petroleum Traders Association.|Economy policy

All the major associations had called off their strike after the government assured an increase in dealer commission from July. When asked about this, a senior official from IOC told Business Standard, “The rollout of daily pricing was done smoothly and there is no disruption reported so far.” Pradhan had assured the dealers that the automation of petrol pumps will happen as soon as possible and a committee is set to submit a report on this.

 ALSO READ : Cattle Sale Ban: The Small Dairy Farmers Are The Ones Left In The Lurch

 ALSO READ : Police Firings Killed 2 Indian Civilians A Week On Average Between 2009-15

 ALSO READ : IT Spend In Indian Banking And Securities Industry To Grow 8.6% In 2017

Worried about daily fuel price changes? How to check prices via SMS

Dealers would get updated price by way of customized SMSs, e-Mails, mobile app, web portals

Amid protests by dealers on the daily price revision of petrol and diesel, State-run Indian Oil Corporation has claimed that it will ensure the best possible prices to customers.

According to the companies, dealers will ensure price updation at their fuel stations before start of sale, every day. Updated prices will be immediately exhibited at all petrol pumps for information of the public. “For their convenience and assurance, customers would be able to fetch daily updated prices of petrol and diesel at all cities through IndianOil’s mobile app - Fuel@IOC. Alternatively, customers may cross-check the prices applicable in their cities by sending SMS RSP<SPACE>DEALER CODE to 92249-92249,” the statement added. Protesting against the move to have daily pricing, dealer groups had called for "no-purchase" starting from June 16. | Economy news

It claimed that extensive training of dealers will be held to ensure that customers do not face any pricing misinformation or glitches. “All the 26,000 Indian Oil dealers will be given timely information on the effective prices at a pre-designated time – say 20:00 hrs for the next day. At a large number of IndianOil’s 10,000 automated Fuel Stations, the daily price can be automatically updated centrally, besides technology also provides to schedule the price change at 00:00 hours,” it added. At the non-automated petrol pumps, dealers would get the updated price by way of four means: customized SMSs, e-Mails, mobile app and web portals.

Diesel, petrol prices to change daily from June 16; dealers raise concerns

Since May 1, the dynamic fuel pricing model has been applied on a pilot basis in 5 cities

State-run oil marketing companies (OMCs) have decided to roll out the daily revision of fuel prices nationally from the second fortnight of June.| ECONOMY NEWS

However, this has raised concerns about viability and inventory management among dealers. Currently, Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) review retail fuel prices every fortnight while taking global crude oil prices into account. "We are planning to have a national launch of the dynamic pricing system by the second half of this month. However, dates are yet to be finalised," said a top official from an OMC. This development comes after reports that petrol and diesel prices will be revised on a daily basis from June 16.

It was on May 1 that the dynamic fuel price model was launched at five locations – Pondicherry, Chandigarh, Jamshedpur, Udaipur and Vishakhapatnam – in line with global practices. Interestingly, private fuel retailers like Essar Oil and Reliance Industries too followed the system in these cities.

"This will be a cause of concern as dealers will not be able to plan on how to manage their inventories. Moreover, not all the outlets in the country are automated. This may also affect our margins," said A D Sathyanarayan, president, the Consortium of India Petroleum Dealers (CIPD). CIPD has a presence in states like Kerala, Tamil Nadu, Karnataka, and Maharashtra. On a monthly basis, each of these outlets consumes an average of 170 kilolitre of fuel. (READ FULL STORY)

ALSO READ : Home loan norms, interest rates: Brokerage views on RBI's policy review

ALSO READ : Hyderabad: Locals allege sale of plastic rice, samples sent for lab testing

ALSO READ : Kerala vs Modi govt: Special Assembly session on cattle sale ban begins

Take note! Petrol, diesel prices to change every day from May 1

Daily price change will remove big leaps in rates that need to be effected at end of fortnight

 

Come May 1, petrol and diesel prices will change every day in sync with international rates, much like what happens in most advanced markets.

State-owned fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), which own over 95 per cent of nearly 58,000 petrol pumps in the country, will launch a pilot for daily price revision in five select cities from May 1 and gradually extend it to all over the country.

"Ultimately, we will be driving towards market linked rates on a daily basis at all pumps across the country," IOC Chairman B Ashok told PTI.

A pilot for daily revision of petrol and diesel price will be first implemented in Puducherry, Vizag in Andhra Pradesh, Udaipur in Rajasthan, Jamshedpur in Jharkhand and Chandigarh, he said.

State fuel retailers currently revise rates on 1st and 16th of every month based on average international price of the fuel in the preceding fortnight and currency exchange rate.

Instead of using fortnightly average, pump rates will reflect daily movement in international oil prices and rupee- US dollar fluctuations.

"It is technically possible to change rates daily but we have to first do a pilot. Once pilot is done and its implications studied, we will extend it to other parts of the country," he said.

While Ashok said the pilot is to be "launched within one month" and did not give a specific date, industry sources said the pilot is planned to be launched on May 1.

Daily price change will remove the big leaps in rates that need to be effected at the end of the fortnight and consumer will be more aligned to market dynamics.

While petrol price was freed from government control in June 2010, diesel rates were deregulated in October 2014. Technically, oil companies have freedom to revise rates but often they have been guided by political considerations.

Rates differ by only a few paise between pumps of the three state fuel retailers. Unbranded petrol at IOC pumps in Delhi costs Rs 66.29 per litre, while the same at BPCL pumps in the city is priced at Rs 66.37 a litre. HPCL pumps sell for Rs 66.48 per litre.

(READ MORE)