FM: Oil and gas sector to be opened up for competition
New Delhi: The Finance Minister P Chidambaram has said that the oil and gas sector would be further opened to competition. He also said duties will be restructured to make oil companies more efficient and bring down fuel costs.

"Oil and gas sector would be further opened for competition, including in retail sector. The segment requires greater consolidation given the technological challenges that it faces," he said at the Petrotech, 2005.

The FM also said that consolidation in the oil sector was required since there was a huge supply-demand gap and the country was going to be more dependent on oil and gas in this century.

Chidambaram also pointed out that it was a paradox that there were both taxes and subsidies on the same petroleum products. He said India and developing countries should learn a lesson from Japan, who converted the oil crisis in 1970s into an opportunity by reducing oil imports.
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White paper on VAT to be released today
New Delhi: Finance Minister P Chidambaram will release a white paper on the value added tax (VAT) today. The new tax regime, which has already got the approval of most states, is due for implementation from April 1, 2005.

The proposal to switch over to uniform state-level VAT from next fiscal got a fillip in June last year when Chidambaram assured states they would get 100 per cent compensation for any loss in revenue.

The white paper would be published in English, Hindi and major regional languages.
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PFC and PGCIL may hit the capital market
New Delhi: The Government has said that it is considering proposals for initial public offering (IPO) of Power Finance Corporation and Power Grid Corporation.

"PFC has sent its proposal. We are examining it but no decision has yet been taken," Power Secreatry R V Shahi told reporters on the sidelines of a conference on open access. Industry sources said that while PFC will be looking at raising Rs1,500 crore, PGCIL is aiming to mop up about Rs1,000-1,200 crore.

Government may also ride piggyback on the two power PSUs to divest some of its stake as was the case with NTPC.
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Power Grid objects to Reliance Energy's application for transmission license
New Delhi: Power Grid Corporation of India Ltd (PGCIL) has objected to Reliance Energy's applications for setting up power transmission lines in the western region and has filed petitions with the Central Electricity Regulatory Commission (CERC) on this issue.

Reliance Energy had earlier filed applications before the CERC seeking licences for setting up transmission lines and substations in the western region. According to the Electricity Act, CERC has to hear Power Grid's views on any transmission licence application that comes up before it. The CERC will hear the case on February 8.

According to Power Grid officials, the utility had earlier invited bids for joint venture partners to strengthen the transmission network in the western region and was willing to offer between 51 per cent and 74 per cent stake to private parties for setting up 20 transmission lines and 13 sub-stations.

In its appeal, Power Grid argued that it had the "required permissions" for carrying out transmission linkages in the western parts of the country. Power Grid also said any move to grant permission to Reliance Energy for setting up transmission lines in the same corridors would only jeopardise the process of its selection of joint venture partners.
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Plans cleared for Coal India subsidiary
Kolkata: The board of Coal India Ltd (CIL) has cleared a proposal relating to the formation of a separate subsidiary to be named Coal Videsh Ltd. The proposed subsidiary is to be incorporated as has been done in the case of ONGC Videsh, subject to the approval of the Union Government.

The proposed subsidiary's function will be to outsource both coking and low ash non-coking from abroad. The outsourcing will be done from mines, which will be developed or owned by it through the joint venture route.

At present, CIL is making its own efforts for participating in global bids for allocation of blocks abroad and/or participation in the equity base of foreign companies through the joint venture route.

According to a senior-level CIL source, the company may not be able to maintain the existing volume of supplies of coking coal to steel plants in the coming years as its own production is declining due to depletion of its coking coal reserve.

According to one view, dwindling reserves and de-rated capacities of old washeries, particularly in Bharat Coking Coal Ltd, are responsible for stagnation/ negative growth in the dispatch of washed coking coal.
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