Diesel Prices Hit Record High

Diesel prices have soared to a record in many cities while petrol is at three-year high as international crude prices hover around $70 a barrel.

The rise in global prices in recent months has raised concerns about inflation and a higher import bill.

The government had raised taxes on fuel when prices had plunged in 2014.

On Monday, diesel was sold for ₹61.74 per litre in Delhi, ₹64.40 in Kolkata, ₹65.74 in Mumbai and ₹65.08 in Chennai.

State oil companies and private firms price petrol and diesel within a few paise of each other. Petrol prices in Delhi and Chennai are highest since August 2014 while they are highest since July 2015 in Kolkata, and since October 2017 in Mumbai.

Petrol cost ₹71.18 per litre in Delhi, ₹73.91in Kolkata, ₹79.06 in Mumbai, and ₹73.80 in Chennai on Monday.

Petrol and diesel prices have been market-determined for the past few years in India where state companies control more than 90% of the fuel retail market.

Companies determine retail prices by adding their marketing margin, dealers’ commission and government duties to refinery gate prices that are linked to international prices of petrol and diesel.

Prices of petrol and diesel in the international market largely follow crude prices although specific fuels’ own demand-supply equation, constraints in refining or transportation capacity and other business or geopolitical events sometimes create divergences. Since July 1, crude oil is up 46%, while diesel has risen 42%, and petrol 22% in the international market, according to Bloomberg data.

In Delhi, diesel and petrol prices are up 16% and 13%, respectively, since July 1. Prices of petrol and diesel vary from state to state according to local levies.

An extended agreement by Organisation of Petroleum Exporting Countries and Russia to curtail output to clear the supply glut has lifted prices substantially in the past six months. The producers’ determination to continue with the cut despite recent price surge, along with healthy demand for oil amid strong global economic growth, has strengthened the oil rally.

Higher oil prices are not good for heavy consumers like India, which imports nearly 82% of its requirement. Higher fuel prices trigger broader inflation, shrink room for rate cuts by central bank, increase demand for foreign exchange, and leave the exchequer with lesser resources for development work as demand for subsidy and tax cuts rises.

Purvanchal Expressway

The nondescript villages of Chand Sarai in Lucknow and Haidariya in Ghazipur will be the two ends of the country’s longest expressway. The Yogi Adityanath-led Uttar Pradesh government has finalised details of the 341-km long Purvanchal Expressway, which will be constructed at an estimated cost of ₹13,186 crore by the end of 2020.

Prime Minister Narendra Modi is expected to lay the foundation stone of the project in February or March. Uttar Pradesh has secured assurances from banks for a loan of ₹15,000 crore for the project, of which ₹2,000 crore has already been released, an indication that lack of finances will not come in the way of completing the project in the targeted 30 months.

Besides being the country’s longest six-lane expressway, linking Uttar Pradesh’s capital to the state’s eastern end, the other unique selling point of the highway is that it will connect the state’s ‘three temple towns’ of Varanasi, Ayodhya and Allahabad.

While Varanasi will be connected through a widened NH that will crisscross the expressway, the state’s Public Works Department will build a link road to Ayodhya from the expressway. The state government has also decided to build a new link expressway that will branch out of the Purvanchal Expressway and go till Allahabad. The government is also doing pre-feasibility study to link the expressway to the chief minister’s home town of Gorakhpur, besides a link up with the new Bundelkhand Expressway being built from Jhansi to Kushinagar.

“This expressway will bring about development of eastern districts by connecting these to the state capital and further to Agra and national capital Delhi through Agra-Lucknow Expressway and Yamuna Expressway. The expressway has the potential to be linked with Patna–Buxar National Highway (NH 922) at Bharauli through NH 19/31,” the state government has said in a request for qualification document, inviting bids through international competitive bidding for constructing the expressway.

Work is expected to start on the Purvanchal Expressway this April, with the entire stretch being divided into eight packages of 28-54 km each, which could be awarded to different companies. The six-lane expressway will be designed for speeds of 120 km/hr with the option of converting it to eight-lane.

Haj Subsidy withdrawn

The Narendra Modi government has withdrawn subsidy given to pilgrims who undertake Haj to Mecca and Medina. No subsidy will be given to Haj pilgrims from 2018. Approximately ₹250 crore was spent on Haj subsidy and the money would now be utilised for education and other welfare measures of Muslim women and girls. A Supreme Court order in 2012 had directed that Haj subsidy should be done away with in 10 years (by 2022).

The Centre was is in talks with Riyadh to work out modalities of sea travel to make Haj affordable for poor Muslims.

The NDA government had increased India’s Haj quota by 5,000. Despite the subsidy withdrawal, around 1.75 lakh Muslims are likely to go on pilgrimage, the highest since Independence. With the government allowing women to go without mehram (male companion), 1,300 women had applied for the pilgrimage and their applications have been accepted. Government will provide lady Haj assistants for the women and take care of some of their logistical requirements, including lodging in Mecca and Medina.

Exports up 12.4%: December 2017

Propelled by engineering goods and petroleum sectors, India’s exports rose 12.4% to $27 billion in December even as the trade deficit touched a three-year high.

Imports too surged significantly to $42 billion, up 21%, on increased inbound shipments of crude oil and gold. Exporters body FIEO said India is on course to reaching the $300-billion milestone for overseas shipments.

The trade deficit or difference between imports and exports was $15 billion, up about 41% year-on-year.

FIEO said that positive growth for the second month in a row, after a fall in October, shows resilience of the Indian exporters.

“Since we have already achieved exports worth $224 billion in first nine months of the fiscal and global trade growth remains robust in 2018, we are on our course to achieve the milestone of $300 billion in 2017-18,” said FIEO president Ganesh Kumar Gupta.

The exports had totalled $275 billion in 2016-17, up from $262 billion in the preceding industry. Exports of engineering goods as well as petroleum products showed an increase of over 25% in December. However, shipments of ready-made garments declined by 8% to $1.33 billion last month. Gold imports surged by 72% to $3.3 billion last month as against $2 billion in December 2016.

The imports of petroleum products and crude oil increased by a significant 35% to $ 10 billion in December, from $8 billion a year ago. 

Somewhere in Rajasthan....

Bengal means Business

Of Foreign tourist arrivals....

In happy tidings for India’s tourism sector, 2017 ended on a high with the number of foreign tourist arrivals crossing the 10-million mark, which pushed the country’s earnings to over $27 billion.

The sector is looking to ramp up tourist arrivals this year with new and niche projects. “I think our sector is doing very well. But am I happy with the numbers? I want these numbers to increase dramatically because India is an incredible place and we have everything for everybody. So we are trying to bring in lot more people,” Union tourism minister KJ Alphons said in Kochi.

The minister also said the sector is contributing 6.88% to India’s GDP and had a 12% share of jobs in the total employment figures in 2017.

The increase in numbers has helped India ramp up its overall ranking on the Tourism Competitiveness Index, 2017. It jumped 25 places from 65 in 2013 to 40 in 2017. Ministry sources attributed the improvement to the government’s renewed focus on developing infrastructure besides promoting theme-based and religious circuits under the Swadesh Darshan scheme. “Eleven projects have been sanctioned under this scheme in 2017-18 alone, taking the total number up to 67 projects. The plan is for holistic development of pilgrimage destinations, the Buddhist circuit being a case in point,” a ministry official said.

Sources in the ministry also said that the government is “looking East” in the tourism sector to promote India’s north-eastern states. As part of the efforts to introduce new concepts to engage the larger world, India’s golf courses have found mention in the ministry’s ‘Incredible India’ campaign alongside the heritage monuments.