New Delhi, May 24
While maintaining that there will be no immediate rollback of the hike in petrol prices, oil companies have indicated that prices may come down next month as part of the revision exercise.

While the move to hike petrol prices is being opposed by political parties, stock markets and industry have cheered the move and even the rupee gained strength today on the back of improved sentiment.

Given the protests of the UPA allies and opposition parties and even the Congress party making some noises, a partial rollback of Rs 2-3 cannot be ruled out. However, that seems to have been inbuilt into the steep hike of Rs 7.5 per litre and even if some rollback were to take place, a major portion of the hike would still go through. It is being argued that an increase in diesel and LPG prices is important to fix the macro health of the economy but given the politically sensitive nature of the products and their use in agriculture, transportation and households, it will be a tightrope walk for the government.

Public sector oil companies indicated today that with global crude oil prices softening, the next revision of prices may see prices coming down.

“The current trend in international prices indicates that prices of petrol can come down," Indian Oil Corporation (IOC) Chairman RS Butola said at a press conference today.

"We are hoping international oil prices will come down. If they come down, we will pass on the benefit as we had done on November 16 and December 1 after the November 4 petrol price hike," he said.

On being asked if there will be any immediate rollback, Butola said, "There is no proposal before us. There is no situation for a rollback. No section of our stakeholders has asked us to reduce prices."

Butola said the oil companies had raised prices after the government ruled out any subsidy on petrol. He said the proposal had been mooted as oil companies were incurring losses on petrol on which they are not paid any subsidy and “it has been a painful decision to raise prices”.

Stock markets were elated with the move to attack subsidies and the BSE Sensex gained 274 points to close at 16,222 points. Dipen Shah, head of fundamental research, Kotak Securities, said the Indian benchmarks closed higher by nearly 2% today and outperformed most Asian markets.

“Government’s decision to increase petrol prices by about 11% and expectations of an increase in diesel, kerosene, LPG prices lifted sentiments. The rupee was stronger by about 1% v/s USD and that also helped the equity markets”, he said.

The rupee also gained strength and closed at 55.65 per dollar after hitting a record low of 56.40 hit earlier in the session.

Chandrajit Banerjee, Director-General, CII, said the increase in price of petrol is quite steep and would not resolve the issue of ballooning fuel subsidy. He said the government should ensure action on diesel and LPG subsidies, including phasing out the huge subsidy on urban use of LPG.

Chandigarh, May 24
The Punjab Government is in no mood to slash the high taxes it imposes on the sale of petrol in the state. The hike in petrol prices, effective from today, will, in fact, leave the exchequer richer by Rs 119 crore per annum.

Sources in the state Excise and Taxation Department informed The Tribune that with an increase of Rs 8.19 per litre in petrol price, because of the enhanced rates, the state government will earn Rs 1.70 per litre as increase in VAT and surcharge. An estimated 70 crore litre of petrol is sold in the state every year, helping the state earn Rs 119 crore per annum as additional tax on the fuel.

States like Uttarakhand and Kerala have already decided not to impose VAT on the enhanced rate of petrol, in an effort to give some relief to the consumers. Though the oil marketing companies have announced a petrol hike of Rs 7.50 per litre, in Punjab, consumers will have to pay an additional Rs 8.19 per litre because of high VAT rate and the surcharge on VAT. Punjab imposes 27.5 per cent VAT, a 10 per cent surcharge on VAT, which is 2.75 per cent of the total cost of petrol, and Re 1 per litre as cess. These taxes add almost Rs 22 to each litre of petrol sold in the state.

Officials in the state Excise and Taxation Department said total VAT collections from petrol and diesel were to the tune of Rs 1,800 crore. “Though the sale of these fuels has gone up, but we have also extended some relief to consumers over the past one year, in the form of reducing the VAT on diesel from 8.8 to 8.25 per cent, and abolishing the octroi. We will not be able to extend more concessions on the tax on fuel,” said a top official.

Meanwhile, JP Khanna, president, Punjab Petroleum Dealers Association, has objected to the stock checking of all fuel retail outlets in the state by the Excise and Taxation Department. “The idea behind this move is to serve notices to the petroleum dealers to pay the enhanced VAT on sale of this stock of petrol (Rs 1.70 per litre) bought by us before the new rates of petrol were announced. This is unfair and we will close down all fuel outlets if the department forces us to pay additional VAT on the stocks lying with us before the hike was announced,” he said.

Mussoorie, May 24
With the rupee continuing its free fall, RBI today indicated that it may sell dollars directly to oil companies to ease pressure on the currency.

RBI Governor D Subbarao, in his interaction with media after the board meeting, also hinted at the possibility of issuance of overseas sovereign bonds to deal with the balance of payment situation.

"RBI will do whatever is necessary. Some structural changes are necessary for improvement in current account. Meanwhile, the RBI is monitoring the situation and we will do whatever is necessary, consistent with our policy," he said.

Direct sale of foreign exchange to oil marketing companies, Subbarao said, "has been an issue on the table. I am not ruling it out. I am also not saying that we are going to do it right now. It's an open issue. We have done it in past. At the moment, we have not done it so far." Several experts, including C Rangarajan, the chairman of the Prime Minister's Economic Advisory Council (PMEAC), have suggested that RBI should consider selling foreign currency to oil companies as they withdraw huge amounts to buy crude in the international market.

As regards the sovereign bonds, RBI chief said, "I cannot say in favour or out of favour. We have done it in the past, it might be done in the future... but it's not something that is being contemplated right now." India in the past had raised funds from overseas markets from issues like Resurgent India Bonds to tide over the balance of payment problems.

After losing ground three days in a row, the rupee today touched its lifetime low of 56.38 to a dollar but recovered to close at 55.65 after Subbarao's press conference.

Pointing out that the rupee has been depreciating over the past three to four months, Subbarao said, "RBI is continuously monitoring the situation. We have taken action through current account flows, encouraged inflows and also (steps) to curb speculation". — PTI

New Delhi, May 24
Bharti Airtel today said it has acquired 49 per cent stake in Qualcomm's broadband wireless access (BWA) business in India for $165 million (about Rs 922 crore).

Under the agreement, Bharti Airtel has made an initial investment of about $165 million to acquire 49 per cent interest in Qualcomm Asia Pacific's India entities that hold BWA licences in Delhi, Mumbai, Haryana and Kerala, the company said.

Qualcomm had won spectrum for high-speed data services in the four circles through auction in June, 2010, and paid Rs 4,912.54 crore for the same.

The present deal has been made partly by way of acquisition of 26 per cent equity interest held by Global Holding Corporation and Tulip Telecom and the balance by way of subscription of fresh equity in those entities, the statement said.

"The agreement contemplates that once commercial operations are launched, subject to certain terms and conditions, Bharti would assume complete ownership and financial responsibility for the BWA entities by the end of 2014," the statement said.

Bharti Airtel already has BWA licences in four circles - Punjab, Maharashtra, Kolkata and Karnataka and services have already been launched in the latter two.

"This partnership will combine the strength of Bharti's national telecom footprint and Qualcomm's technological leadership in the LTE TDD space. With a broadband ready network across India, Bharti is well positioned to lead the next phase of Indian's telecom revolution," Bharti Airtel CMD Sunil Bharti Mittal said. 

Chandigarh, May 24
After expanding its India operations through contract manufacturing of all its product range, the world’s largest direct selling company, Amway India, is now setting up its own facility.

The company will invest Rs 400 crore to set up the new facility. Though company officials are tightlipped about the place where it will set up its manufacturing unit, sources say the plant will either come up in south or west India. The company is evaluating the places chosen for setting up the plant. It proposes to start commercial production at its own plant by 2014.

Bhuvan Kapur, vice-president, North, Amway India, said the new plant would produce its flagship brand Nutrilite and beauty products. “The company’s manufacturing facility will produce goods in addition to the production being outsourced to our seven contract manufacturers in India. As we grow in India, we will need to enhance our capacities in India, which is the second largest market for Amway in Asia, after China,” he said.

Amway India clocked a turnover of Rs 2,130 crore in 2011 and is now targeting a revenue of Rs 2,500 crore in 2012. “Our strategy to maintain the growth momentum is by launching more products through direct selling while competing in the Fast Moving Consumer Goods (FMCG) space. This year, we will launch a new range of nutritional supplements to promote healthy ageing. We are also increasing our total spend in advertising,” he said.