The performance of refinery, electricity, and cement in March 2009 recorded positive growth over the performance of March 2008.

Crude Oil production registered a negative growth of 2.3% in March, 2009 compared to a negative growth rate of 0.3% in March, 2008.

Petroleum refinery production registered a growth of 3.3% in March, 2009 compared to a growth of 0.1% in March, 2008.

However, coal production took a nosedive by registering a growth of 5.2% during March, 2009 compared to a growth rate of 9.3% in March, 2008.

Electricity generation registered a modest growth of 5.9% in March, 2009 compared to a growth rate of 3.6% in March, 2008.

Cement production registered a growth of 10.1% in March, 2009 compared to 9.3% in March, 2008.

Production of finished (carbon) steel registered a negative growth of 2.6% in March, 2009 compared to a negative growth of 0.9% in March, 2008.

 

Events

NELP-VIII

Mr. R.S.Pandey, Petroleum Secretary, has reportedly said that New Exploration Licensing Policy (NELP-VIII) may be split, and a small number of exploration blocks or areas will be put up for bidding early in order to test the response in view of the global financial meltdown.

He further said that NELP-VIII will be announced as early as mid-April. With two-third of its sedimentary basis remaining unexplored, India is pushing for private and foreign investment to uncover its hydrocarbon potential as it wants to raise domestic oil and gas output to cut import dependence.

Lex Loci

Legislation for 10 years imprisonment to check oil pilferers

Ministry of Petroleum and Natural Gases is reportedly working on a legislation that would entail imprisonment up to 10 years for the offence of tinkering with oil and gas pipelines. The proposed legislation would provide punishment of death or life imprisonment for tinkering with the pipeline through the use of fire or explosives, knowing fully well that such an act can cause for death or serious injury to any person.

This move of the Ministry is in view of growing incidents of puncturing oil pipeline network to pilfer oil and gas by anti-social elements in many parts of the country, especially in Assam, Gujarat and Rajasthan,.

Policy Corner

Natural Gas may get tax exemption.

Government is reportedly considering extending tax holidays to natural gas producers and all future explorers of Indian hydrocarbon reserves. This is expected to be announced in the interim budget of the outgoing government.

The uncertainty over tax holidays for natural gas producers began after the Finance Bill 2008-09 proposed to redefine mineral oil in Section 80-IB(9). As per the explanatory memorandum to the budget, the term ‘mineral oil’ does not include natural gas.

 

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Rulings

MRTPC orders probe

Monopolies and Restrictive Trade Practices Commission (MRTPC), the anti-monopoly watchdog, has ordered an inquiry into the sudden and unison hike in air fares and withdrawal of promotional fares by airlines. The Directorate General of Investigation and Registration, the investigation wing, will conduct the inquiry.

DGCA seeks explanation

Director General of Civil Aviation (DGCA), the aviation regulator, has reportedly initiated proceedings against airlines who have hiked their low-end fares suddenly and in a unison manner. DGCA has issued a directive to the airlines to submit their response within the prescribed time saying that “it felt that there appeared to be no rationale for increasing the airfares simultaneously”.

Policy Corner

Airlines not to show surcharge, airport fees as taxes

It is reported that the directorate general of civil aviation (DGCA) will soon issue a circular to make it mandatory for the airlines to show components like airfares and charges separately, and not to show fuel surcharge and airport charges as taxes. The said circular will also make it mandatory to show all the components of a ticket separately on the websites and advertisements of the airlines.

Government plans to allow FDI in domestic civil aviation

Mr. Praful Patel, Civil Aviation Minister, has said that the government is examining the proposal of allowing foreign direct investment (FDI) by foreign carriers into domestic aviation sector.

Equity investment from foreign airlines, either directly or indirectly, is currently prohibited in Air Transport Undertakings engaged in operating scheduled Air Transport Service. However, FDI up to 49% and non-resident Indian investment up to 100% is allowed for Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline. The civil aviation ministry is reportedly lobbying with various government arms for relaxing the foreign direct investment (FDI) policy.

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Rulings

SC ordered notice on Coal Distribution Policy of 2007

The New Coal Distribution Policy of October 18, 2007, which forced the coal consumers to purchase 25% of the quantity through e-auction, was challenged before the Hon’ble Supreme Court of India.

The Supreme Court has issued a notice to the Government of India, Coal India and others on a petition alleging that the New Coal Distribution Policy of 2007was arbitrary and discriminatory. It is also alleged that the said Policy is violative of the Supreme Court’s Judgment in the case of Ashoka Smokeless Coal India Pvt. Ltd Vs Union of India.

Policy Corner

Government plans to allow commercial coal mining through PPP

The Government is likely to permit commercial coal mining through Private Public Partnership (PPP). Private companies are currently permitted to mine coal only for their captive consumption.

Ministry of Coal has reportedly sought advice of the Ministry of Law on whether sub-leasing of coal blocks allocated to government companies/ joint venture government companies is permitted under the provisions of Coal Mines (Nationalisation) Act, 1973. It is reported that the Additional Solicitor General of India has already advised affirmatively on the condition that a government company should own 26% stake and controls the composition of board of directors of the sub-lessee.

The new norms on notification will allow private companies to sell domestic coal in the open market and to pick up to 74% equity in coal mining projects.

 

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Events

India to join IRENA

The Union Cabinet has reportedly given consent for India to join the International Renewable Energy Agency (IRENA), which would enable the country to gain access to the latest research and development of renewable energy technologies.

The Union Cabinet has also given clearance for India to contribute USD 112,500 in the first year of it’s joining IRENA.

Policy Corner

New Guidelines for power plants within SEZs

The Ministry of Commerce has issued new guidelines for power plants within Special Economic Zones (SEZs), which cover both stand-alone electricity generating zones and captive units, and permit sale of power to users based outside SEZs.

The new guidelines have made setting up of power plants within SEZs more lucrative and attractive than outside as the formalities required to start such projects in SEZs are much easier compared with the non-SEZ areas.

Cross-border power trading norms announced

The Central Electricity Regulatory Commission (CERC) announced significant changes in the power trading policy. As per the new policy, Indian companies are able to import power from its neighbouring countries like Nepal and Bhutan and sell it in the domestic market.

The other changes brought about by the new policy inter alia include increasing the net-worth requirement for the traders, banning purchase of power from defaulting utilities and limiting the number of licence categories to three.

Custom duty exemption to naphtha extended

The exemption from custom duty given to naphtha imported for power sector has been extended beyond 31 March 2009. The move is expected to give some relief to both the generators as well consumers as 1% cut in duty results in per unit tariff reduction of 4 to 5 Paisa.

 

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