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Monday,25-October-2021

Business

BPCL post privatisation to bear cooking gas subsidy

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Tanker-lorry

Cooking gas customers may continue receiving subsidy into their bank accounts post privatisation of PSU oil refiner and retailer Bharat Petroleum Corporation Ltd (BPCL), with the government clarifying to potential investors that the present system would not be changed post the change of management in the company.

Sources said several potential bidders for BPCL in their query have raised the issue of subsidy on cooking gas, whether such subsidy would be borne by the new owners post the sale of government stake in the company. The government head clarified that the present system where the oil companies pay the subsidy amount and the government reimbursed such payments would continue.

Private oil companies such as Reliance, Nayara Energy do not get any subsidy support from the government for cooking gas. So if these companies were to sell domestic LPG cylinders, it would be priced at market rates.

“The government wants to change the status of more than eight crore cooking gas subscribers with BPCL. They would continue to get subsidy post-privatisation. But since such subsidy first have to be paid by the company, the bidding parameters for BPCL would need to be reworked,” said one of the potential bidders for BPCL.

The government has allocated Rs 40,915 crore as petroleum subsidy for FY-21, a six per cent increase from Rs 38,569 crore allocated for the last fiscal. Of this the allocation for LPG subsidy has been increased to Rs 37,256.21 crore for the current year. But till now in the first quarter, government had to draw nearly Rs 1,900 crore from subsidy provisions.

What concerns companies is government subsidy reimbursement which is often delayed resulting in changes in financial reporting.

OMCs gross under-recoveries on LPG in FY-19 was Rs 31,500 crore which was nearly 73 per cent of the total amount. In FY-20, five months of LPG subsidy payments to OMCs has been rolled over.

Business

Equity indices trade lower; Sensex down by over 300 pts

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India’s key equity indices – S&P BSE Sensex and NSE Nifty50 – traded lower during Monday’s early-morning session.

At 10 a.m., the 30-scrip sensitive index traded at 60,504.75 points, down 316.87 points or 0.52 per cent.

The Sensex opened at 61,398.75 points from its previous close of 60,821.62 points.

Besides, the NSE Nifty50 traded at 17,989.40 points, lower by 125.50 points or 0.69 per cent.

It opened at 18,229.50 points from its previous close of 18,114.90 points.

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Nissan, Porsche face action over false emissions information

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South Korea’s antitrust regulator has decided to order Nissan Motor, Porsche AG and their two Korean units to take corrective steps for falsified information over gas emissions of their diesel cars.

Nissan Motor, Nissan Korea, Porsche and Porsche Korea are alleged to have stated false information about gas emissions of their diesel vehicles imported for sale in South Korea, according to the Korea Fair Trade Commission (KFTC).

The KFTC also decided to impose a fine of 173 million won ($146,700) only on Nissan Korea, reports Yonhap news agency.

Illegal software installed in their cars caused gas emission reduction devices to not fully operate during normal driving conditions.

The practice meant that the cars did not meet permissible emission levels, but the automakers falsified such facts in signs attached to their cars, according to the commission.

In September, the regulator fined Audi-Volkswagen Korea and Stellantis Korea a combined 1.06 billion won for similar allegations over gas emissions.

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Fuel price hike paused after 5 days of increase

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The price hike of petrol and diesel paused on Monday after increasing for the last five days to reach their highest-ever levels across the country.

Accordingly, the pump price of petrol in Delhi remained at Rs 107.59 a litre, while diesel prices also stood at Sunday’s level of Rs 96.32 a litre, according to a price notification of state-owned fuel retailers.

In the financial capital Mumbai, where petrol prices increased to Rs 113.47 per litre and diesel to Rs 104.47 a litre, the highest among all metros, there was no further hike in the retail rates on Monday.

The fuel prices remained static on October 18 and 19, but increased for a fourth straight day by 35 paise per litre previously before again rising for five consecutive days between October 20 to 24. There was no change in rates on October 12 and 13.

Diesel prices have now increased on 24 out of the last 31 days, taking up its retail price by Rs 7.80 per litre in Delhi.

Due to the sharp hike, the fuel is now available at over Rs 100 a litre in several parts of the country.

This dubious distinction was earlier available to petrol that had crossed Rs 100 a litre mark across the country a few months earlier.

Petrol prices had maintained stability since September 5 but oil companies finally raised its pump prices last week.

The rates increased on 21 of the previous 27 days taking up the pump price of petrol by Rs 6.40 per litre.

Crude price has been on a surge rising over a three-year high level of over $86 a barrel as global demand remains firm while OPEC+ continues to move s lowly on increasing production.

Since September 5, wthe price of petrol and diesel in the international market is higher by around $9-10 per barrel as compared to average prices during August.

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