New Delhi: The government finally acknowledges that rising oil prices and depreciating rupee would severely dent the government resources, putting further pressure on deteriorating deficit position and creating hurdles in the path a faster economic recovery.
As per latest estimates by the oil ministry’s Petroleum Planning and Analysis Cell (PPAC), country’s oil import bill may balloon to $125 billion in FY19, a growth of 42 per cent over $88 billion paid for oil in FY18.
This will make oil import bill for FY19 the highest in the five years of the Narendra Modi government and very close to high import bill during UPA-II when the crude oil prices had breached all records to touch close to $140 a barrel mark.
The Centre has so far maintained that though rising oil prices was a concern, it still remained manageable without upsetting the macro economic fundamentals of the economy. But sources now say murmurs have already started in the corridors of power that oil situation should be taken seriously as inaction could mean sharp cuts in populist government’s expenditure ahead of 2019 general elections.
“The $125 billion import bill for the current financial year is high but it is still not the right estimate. Oil import bill could increase further as high crude price will rise further during the rest of the five months of the year, especially after the US sanctions on Iran becomes a reality. Further, pressure on the rupee could also dent estimates,” said an oil sector analyst asking not to be named as he was still making his calculations on oil imports.
PPAC estimate has also taken average price of the Indian basket crude oil for September 2018 at $77.88 a barrel and average exchange rate for September at Rs 72.22 to a dollar to arrive at its import estimates. The benchmark Brent oil price is already higher at $79 a barrel and is expected to start rising again in November when the US sanctions on Iran comes into effect.
Analysts also expect the rupee to depreciate further, completely changing the oil mathematics for FY19.
If crude price rises by $1 per barrel, the net import bill will increase by Rs 6,158 crore. And if exchange rate increases by Re 1 to a dollar, the net import bill rises by Rs 6,639 crore. This PPAC estimate, is based for period between October 2018 and March 2019.
Its not just higher import bill, but rising crude could also put additional burden of subsidy contribution on state-run upstream companies – ONGC and OIL, and also gas transportation company GAIL. Upstream contribution has been suspended since FY17 giving enough room to these companies to improve profits. Already, oil marketing have been asked to absorb RS 1 increase in retail price of petrol and diesel, an exercise that could severely dent their profits.
While the recent spike in oil prices has alarmed the government, it is worth noting that fall in crude prices has resulted in big savings for the country in FY16 and FY17. India’s import bill nearly halved to $64 billion in FY16 even though the country imported higher 202.1 million tonnes of crude oil in that financial year. This compared with import of 189.4 million tonnes of crude oil for $112.7 billion in FY15.
In FY17, the import bill, however, rose marginally top over $70 billion. The lower import bill came on average crude price of around $46.17 a barrel in FY16. In FY17, the average crude price increased marginally to just over $47.56 a barrel. The Indian basket of crude oil averaged $56.43 a barrel in FY18.
After collapsing in mid-2014 due to a supply glut, crude prices remained low for three years. In fact, it touched $30 a barrel early in 2016. But in the last few months it has gained sharply.
Sanctions on Iran could result in some supply disruptions. This could just be the beginning of further bad news for India. Iran is pumping nearly 4 million barrels a day of oil since the 2015 nuclear deal with six world powers that lifted crippling sanctions on the country.
A major disruption in Iran could send crude prices sharply higher just as the oil market is emerging from a prolonged period of oversupply. Iran was India’s second biggest supplier of crude oil after Saudi Arabia till 2010-11 but western sanctions over its suspected nuclear programme relegated it to the 7th spot in the subsequent years.
In FY17, Iran again became third largest oil supplier to India with its supplies jumping to 27.2 million tonnes.
WPI inflation at 8-month low of 3.80 pc in Dec on softening fuel, food prices
New Delhi: Inflation based on wholesale prices fell to a 8-month low of 3.80 per cent in December, 2018, on softening prices of fuel and some food items.
The Wholesale Price Index (WPI)-based inflation stood at 4.64 per cent in November, 2018, and 3.58 per cent in December 2017. According to the government data released on Monday, deflation in food articles stood at 0.07 per cent in December, against 3.31 per cent in November.
Vegetables, too, saw deflation at 17.55 per cent in December, compared to 26.98 per cent in the previous month. Inflation in the ‘fuel and power’ basket in December slumped to 8.38 per cent, nearly half of 16.28 per cent in November.
This was on account of lowering of prices of petrol and diesel through December. Individually, in petrol and diesel inflation was 1.57 per cent and 8.61 per cent, respectively, and for liquified petroleum gas (LPG) it was 6.87 per cent during December.
Among food articles, potato prices became cheaper substantially with inflation at 48.68 per cent in December, as against 86.45 per cent in November.
Inflation in pulses stood at 2.11 per cent, while in ‘egg, meat and fish’ it was 4.55 per cent. Onion witnessed deflation of 63.83 per cent in December, compared to 47.60 per cent in November.
The 3.80 per cent inflation is the lowest in 8 months, and a lower inflation than this was last seen in April at 3.62 per cent. Data for retail or consumer price index-based inflation would be released later in the day.
The Reserve Bank of India (RBI) mainly takes into account retail inflation data while formulating monetary policy. In its fifth monetary policy review for the fiscal, last month, the Reserve Bank kept interest rates unchanged, but held out a promise to cut them if the upside risks to inflation do not materialise.
The central bank lowered retail inflation projection to 2.7-3.2 per cent for the second half of the current fiscal, citing normal monsoon and moderate food prices.
Air tickets, identity cards to become redundant; flyers can use facial recognition to enter airport
New Delhi: The hassle to show air tickets and identity cards at Airport will be over as air travellers can soon enter airport with facial recognition biometric facility.
GMR Hyderabad International Airport Ltd (GHIAL) that operates the Rajiv Gandhi International Airport (RGIA), has successfully conducted the trial of facial recognition technology. During the first phase of the trial, employees of GHIAL were included. The second phase of the trial is expected to be launched by the end of this month, in which GHIAL will include common air fliers. And if the second phase of the trial is successful, GHIAL will implement facial recognition technology in Hyderabad airport from March onwards.
Three phases of facial recognition technology
First phase: GHIAL has installed facial recognition cameras in the Hyderabad. In the first phase, the imaging of passengers will be done through these cameras which will recognise the faces of the flyers.
Second phase: There would be a centralised registration system for passengers. Each passenger’s face will be attached with his/her photo identity like passport, Aadhaar, voting id, driving licence etc. The details of passengers along with his facial mapping will be scanned and stored by GHIAL through the centralised registration system at the Airport.
Third phase: The ID proof of the passengers along with their facial mapping will be stored at the e-boarding gate of the Airport.The data centres at Airlines will also have similar information. Whenever such passengers book tickets, the data system will alert the Hyderabad Airport authorities.
The moment you book a flight ticket originating from Hyderabad airport, your details will be shared by the data centre and the information will be given to all the concerned authorities.
When you reach the Hyderabad terminal gate, face recognition technology will identify you and all your details will be shared on the screen. The security personnel at the gate will access all your information via the system.
Similarly, your details can be accessed by the security personnel at the check-in counter, security check-in. Once the formalities are done, passengers will get an online boarding pass on their mobile phone.
Maruti all-new WagonR 2019 available for booking at Rs 11,000
New Delhi: Country’s largest car manufacturer Maruti Suzuki India on Monday said that its all-new WagonR is available for booking starting.
Customers can book the 3rd generation WagonR at authorized dealer network across the country by paying Rs 11,000. They can also book the car online.
The New WagonR is powered by the advanced K-series engine offering high fuel efficiency and an unmatched driving experience, Maruti said. The car now comes with a new 1.2 L engine option that delivers powerful and impressive performance coupled with great fuel economy. Customers will also have the choice of 1.0 L engine for the all-new WagonR.
Maruti Suzuki’s acclaimed two pedal technology will also be offered in the new WagonR. The Auto Gear Shift (AGS) offers. Maruti said that for the first it is going to offer the most innovative SmartPlay Studio infotainment experience in the Big New WagonR.
The car will be available in Pearl Poolside Blue, Pearl Nutmeg Brown, Magma Grey, Pearl Autumn Orange, Silky Silver and Superior White Range of variants. The Petrol: 1.0 L engine will be available in Lxi, Vxi / Vxi AGS variants while the Petrol: 1.2 L will be available in Vxi, Vxi AGS, Zxi / Zxi AGS variants.
“The new WagonR gets bigger with enhanced comfort. The car’s sturdy and masculine look with true tall boy design makes for a strong road presence. The Big New WagonR not only embodies strong looks but is also stronger inside out,” Maruti said in a release.