PETRO CRISIS
Recurring Problem
As government fears hiking petro prices, it is forced to deal with recurring consequences of shortage and loss
By A CORRESPONDENT
After days of renewed disruption of petrol supplies, the Indian Oil Corporation (IOC) has resumed the supply of petroleum products to Nepal from Monday (May 14).
Newspapers have quoted a high-ranking Indian official as saying that 1,009 kilolitres of petroleum products have been routed to Nepal – which is still much less than normal supply of over 1900 kilolitres.
The news reports of IOC’s partial resumption of supplies followed reports that Nepal Oil Corporation (NOC) had made partial payment of Rs 1 billion to the IOC.
After the IOC slashed the supply by 40 percent since last one week, citing non-payment on the part of Nepal, there was a huge shortage of fuel in the country. Prime Minister Girija Prasad Koirala talked with Indian ambassador Shiva Shankar Mukherjee on Saturday (May 12) on the issue of ending petroleum crisis.
“The political consequences resulting from shortage of fuel was briefed (to the envoy) and appealed for resuming supplies,” Rajendra Mahato, Minister for Industry, Commerce and Supplies said.
Earlier, the Ministry of Industry, Commerce and Supplies said it was planning to present a proposal at the cabinet asking for Rs 240 million a month from the Finance Ministry to tide over the financial problems faced by NOC. Sources said that since the Ministry is not in the mood to allow the NOC to hike the fuel price given the planned CA elections, such a proposal is being mooted to resolve the problems of supply cut down and soaring losses in cooking gas.
The Ministry is proposing to sell the cooking gas at actual cost – the NOC is said to be incurring Rs 256 loss per cylinder of cooking gas. In order to do so, the distribution and retail sales of cooking gas will be handed over to private sector. The NOC will sell cooking gas at actual cost to private players who will then sell them at retail level by adding necessary taxes, transport cost and so on.
The government will fix Maximum Retail Price for terai and hilly region. The MRP will be around Rs 1200 per cylinder, the source said. “Private operators will fix retail price remaining within the MRP limit,” the source said. Likewise, it will also segregate cooking gas for domestic use and industrial/commercial use (where large-sized cylinders will be used). At present, the NOC incurs Rs 254.8 million loss every month. The new provision on cooking gas pricing will bring this down to Rs 100 million. Currently, NOC incurs Rs 6.55 loss per liter in petrol; Rs 4.31 per liter in diesel; and Rs 2.35 per liter in kerosene. In aviation fuel, it makes profit of Rs 16.85 per liter.
Carlsberg Accelerates Brewing
Carlsberg's joint venture South Asia Breweries has accelerated brewing in India. This has been made possible after the company acquired an existing brewery in the state of Himachal Pradesh north of the Indian capital of New Delhi, according to a press release.
Production at the brewery, which has a capacity of 150,000 hl and with possibilities for significant expansion of capacity, will be up and running shortly, whereas the construction of the greenfield brewery with an initial capacity of 450,000 hl in the state of Rajasthan south west of Delhi will be completed in Q1 2008.
The brewery in Himachal Pradesh is ten years old. It is one of the very few breweries in North India with brewing equipment as per European standards, and the brewery has a unique location due to its close proximity to most of the beer consuming north Indian states. New Delhi is at a distance of only 280 km from the brewery.
