TIMELINE: The fall of Mohamed Mursi

Source: http://in.reuters.com

(WARNING: CONTAINS SOME GRAPHIC CONTENT) July 5 – A look back at the significant events in the days that led to the downfall of Mohamed Mursi, Egypt’s first democratically elected president, after only one year in office

Sebi cracks whip on Gillette India promoters, directors

Sebi freezes all corporate benefits to Gillette India promoters

 Taking action against promoters of Gillette India for non-compliance to minimum public holding norms, market regulator Securities and Exchange Board of India (Sebi) on Friday ordered freezing all corporate benefits arising out of their stake in the company.
     
Besides, Sebi also prohibited the promoters and directors of the company, which is part of global consumer goods giant Procter & Gamble (P&G), from dealings in the shares of Gillette India, except for meeting the minimum 25 per cent public shareholding limit, till the time of their compliance to this requirement.

The corporate benefits which would be frozen include voting rights, issuance of bonus shares, dividend payments etc.
    
In addition to these interim orders, Sebi also warned the company, its promoters and directors of further penal actions including monetary penalties, prosecution proceedings and restriction in its trading, in the event of continued non- compliance. The company has been asked to present its case before Sebi within 21 days.
     
The order follows the disposal of Gillette's appeal by the Securities Appellate Tribunal (SAT) on July 3 against a previous decision by Sebi, wherein a proposed scheme of shareholding arrangement to meet the norms was rejected.
     
Gillette had offered to classify a senior Indian executive as a public shareholder, from a promoter entity previously to meet the norms, but Sebi rejected it.
      
As per minimum public holding norms, all private sector listed companies were required to achieve at least 25 per cent public shareholding by June 3, 2013. A day after this deadline passed, Sebi on June 4 passed similar orders against 105 companies, but Gillette was not part of those actions, as the company had at that time got an interim relief from SAT.
     
While dismissing Gillette's appeal, SAT also vacated that interim stay in its July 3 order and paved way for Sebi to take necessary actions against the company.
     
As per Sebi order, Gillette India's promoters and directors have also been restrained from taking up any new position as a director of any listed company till the time the company meets the minimum public holding norms.

Source: NDTV Profit

Hiring activity slows in June quarter; IT jobs on the rise

Hiring activity slowed down in the first quarter of the current fiscal, according to a survey by industry body Assocham. The slowdown reflects the continued sluggishness in the Indian economy, which grew at the slowest pace in a decade in the last fiscal.

New job vacancies during April to June quarter declined by two per cent from 1.28 lakh new jobs in the corresponding period last year. Chennai, Hyderabad and Mumbai witnessed a sharp fall in new, Assocham said in a report titled 'Job Trends Across Cities & Sectors.'

"Overall, these numbers portray a dull job market owing to on-going global economic slowdown," D.S. Rawat, national secretary general of Assocham said.

Delhi-NCR (national capital region) generated most number of jobs, while the IT sector remained the biggest employment generator in the country, the survey found. Delhi-NCR accounted for 34,000 new jobs or over 27 per cent of the total 1.25 lakh new jobs generated across India in the three months to June 2013. Kolkata and Bangalore also saw higher job vacancies.

IT, ITeS and hardware together accounted for over 39 per cent new jobs generated across India, while the banking, insurance and financial services (BFSI) sector accounted for about 14 per cent new jobs. Academics accounted for over 11 per cent new jobs, the survey found.

The worrying fact was the sharp slowdown in new jobs in the core sectors such as real estate, engineering and construction and automobile. Each of these sectors accounted for just 2-5 per cent of new jobs, indicating the sharp slowdown in India's manufacturing sector.

Source: NDTV Profit

PAN card: Submitting this information may soon become mandatory

As part of its drive against fake Permanent Account Number (PAN), the Income Tax Department is considering making the proof of date of birth mandatory for issuance of the cards.

"The department might ask for proof of date-of-birth for issuing a PAN card. Ration cards and rent receipts might no longer be accepted as proofs of identity and address for issuance of a PAN card," sources in the Finance Ministry said.

According to officials, in most cases of fraud, people have furnished fake ration cards and rent receipts to get PAN card.

As of now, depository account statement, bank account statement /passbook, ration card, passport, voter identity card, driving licence, property tax assessment order and certain other documents are accepted as proof of identity as well as address.

"We will soon prescribe a format for PAN verification to make the system foolproof and robust," sources said.

The sources further said that a notification regarding streamlining process of PAN verification will be issued soon and it will apply only to fresh applicants.

Recently, the I-T department has found a number of individuals possessing fake PAN cards as identity proof.

According to the official data, 170 million people in India have PAN cards, while only 30 million of them file income tax returns.

Many people who do not file tax returns get PAN card as it works as identity proof at many places.

The finance ministry had last year brought out a new PAN application form -- 49A -- for use of Indian citizens, companies and entities incorporated in the country which allows the applicant to mention his or her Aadhaar number.

Source: NDTV PROFIT

Why the worst may not be over for the global economy

More than three years after the end of the global recession, sluggish activity across rich and poor economies is confounding policymakers who expected more by now and raising concerns that options for kick-starting growth are increasingly limited.

They face a sobering checklist:

The U.S. economy remains shackled by a mountain of household debt and continues to whipsaw between periods of modest growth and next to none at all.

The euro zone is mired in recession, lurching from crisis to crisis and now dealing with the latest trouble spot in Cyprus.

And even such star performers as China and Brazil have run low on gas. China in 2012 posted its weakest year of growth since 1999. Brazil's economy slowed to a near standstill; at the same time, it faces a growing threat from inflation.

Against this backdrop, the exasperation of finance ministers and central bankers attending last week's Group of 20 and International Monetary Fund meetings was palpable. The official communiques and sideline discussions reflected their frustration over the failure so far to deliver an effective mix of policies to finally get an upper hand on a long-lasting crisis that shows little sign of ending.

"We cannot unmistakably declare that the worst is behind us," Brazilian Finance Minister Guido Mantega said on Friday. "There is a risk of a prolonged crisis, despite all our efforts in the G20 and other international forums."

Central banks across the developed world have held interest rates at rock-bottom levels since 2008 while pumping more than $6 trillion into their banking systems through loans and asset-purchase operations known as quantitative easing, or "QE." The European Central Bank has helped lower borrowing costs for the governments of Spain and Italy. Ireland, Portugal and Greece have been bailed out.

And yet a return to normalcy appears a distant dream.

The IMF last week ratcheted back its projections for world economic growth in 2013. Rich nations face a third consecutive year of growth below 2 per cent, with U.S. GDP seen growing just 1.9 per cent.

The IMF projects Japan's economy will be so weak consumers will bid prices just 0.1 per cent higher this year, while China is seen accelerating only marginally to an 8 percent rate. Weakened demand has fueled a plunge in commodities including copper, which will hurt the economies of Latin America.

At the meetings of top finance officials in Washington, frustrations were especially evident regarding the euro zone, which is beset by a debt crisis. The IMF expects the euro zone economy to contract for a second consecutive year.

"Unless Europe gets its act together and unless the green shoots that we see in the U.S. actually flower and become solid plants, and unless Japan does the near impossible task of reflating its economy and having inflation of 2 percent - how is it that developing and emerging market economies can achieve high growth?" Indian Finance Minister P. Chidambaram said at an event on the sidelines of the meetings.

WARILY WELCOMING JAPAN'S STIMULUS

The desire for a stronger path of growth helps explain why officials, even those in emerging markets, have had a sanguine response to Japan's new plans to stimulate its economy with $1.4 trillion in bond-buying by the country's central bank.

Mr Mantega pointed out that unemployment remains high in large advanced economies and that more fiscal stimulus may be needed, an elixir that has been resisted in some quarters, particularly in the euro zone. He also noted that emerging markets are "inevitably affected" by tepid demand in the United States, Japan and elsewhere, as they have been unable to sustain the kind of growth rates seen in years past.

Still, it was clear officials worried advanced countries were becoming overly dependent on ultra-easy monetary policies that have become less effective over time. Years of low interest rates could even plant the seeds for the next crisis.

"Even though some advanced economies did several rounds of QEs, nothing changed," a South Korean G20 official told Reuters.

Part of the climate of frustration in global policymaking circles results from the fact the that the global economy is more interconnected in terms of finance and trade than it was a few decades ago, making it more difficult to adopt policies that help one country without hurting others.

Before the 2007-2009 financial crisis, a handful of advanced nations dominated international economic policymaking. Now the G20, which includes rich and poor countries as well as the European Union, is the principal venue for steering the global economy.

Poor nations worry that rich nations' monetary stimulus will destabilize their economies by flooding them with capital, fueling inflation or asset bubbles. Money printing by the United States, Europe and Japan also subtracts value from the currencies of the rich world, helping its exporters at the expense of factories in countries like Brazil.

This breeds tension in a large forum like the G20, where a variety of contrasting voices compete to shape consensus.

"You're not going to have a perfectly optimal set of policies for everyone in the world," said Tharman Shanmugaratnam, chairman of the International Monetary and Financial Committee, which advises the IMF on the global monetary and financial system.

Mr Tharman said the trick was to find a mix of policies that would help economies grow without risking future bubbles. "We need a new framework," he said.

Copyright @ Thomson Reuters 2013

Ford EcoSport: An affordable SUV for Indian market

Global auto major Ford launched its much anticipated compact sports utility vehicle `EcoSport` this week. The market is abuzz with comparisons between EcoSport and Sedans as well as SUVs. 

Vehicles like Maruti Swift Dzire, Honda Amaze as well as the Renault Duster have been facing constant comparisons with the new EcoSport even before the latter was launched.
Will Ford’s new car be able to live up to the hype? Will it become a game changer in the Indian car segment? Murad Ali Baig, Automobile Expert, in a candid interview with Reema Sharma of Zeebiz.com shares his views on the car.

Excerpts:

How will the Ford EcoSport perform in the Indian market?

It is big enough to carry five passengers with their luggage but small enough to be convenient for city driving as well. In addition to it, the car has big 16” wheels and a high ground clearance to take you over fairly rough roads. Its tiny 999 cc petrol engine delivers a huge 125 BHP, comparable to a normal 1600 cc engine. As it is a fuel miser, many buyers may find it of better value than the 91 HP 1500 cc TDCI diesel twin that is also available. All modern engines are very fuel efficient.


Will the aggressive pricing of the EcoSport shift the Sedan customer base?

Now that the price of the long awaited new Ford EcoSport has been announced, buyers can get themselves a very versatile car with a revolutionary engine. I believe the EcoSport will be a game changer and get good sales not only from the SUV segment but also from the huge large hatchback and small saloon segments too. It has a great performance. It will compete across many segments.

Do you think the specification of the vehicle is as good as any other premier SUV?

The EcoSport may not be a true SUV, but is `macho’ enough for any urban cowboy. It is a two-wheel drive and not a true blue SUV, but then most Indian SUV buyers opt for a two-wheel drive. I was able to test drive it on a 200 KM stretch in Goa and was surprised that a small 3-cylinder engine could deliver so much power from low revs. It also had such a huge torque that I could have driven the entire route in 3rd gear, in which it could easily accelerate from low speeds to 90 KMPH. It was almost like driving with automatic gears. 


Are you satisfied with the performance of the car?

This revolutionary new `EcoBoost’ turbocharged engine, with direct fuel injection and variable valve timing, was selected as the `Engine of the Year’ last year. It is good looking in a chunky way that is common to all SUVs and also offered a good ride, handling and steering control on the twisty track that had a few bad patches. It may not have been a great sprinter but accelerated easily to hit 130 KMPH on the few clear patches. It felt assured at all speeds. 

There was plenty of inside space in this car that is just a whisker shorter than 4 meters in length for easier parking. The high seat position offers good visibility and easy entry and exits. The attractive dashboard with an angular design looks like something out of a stealth bomber, but comes loaded with every mod con that young drivers would desire. 

The Ford Sync takes `hands free’ driver communications to a whole new level, with a system that allows voice controls not only for the music system but also for the complete management of mobile telephony and messaging. 

Is the price of the car satisfactory?

Though the range starts at a very attractive price of Rs. 5.59 lakhs, this is surprisingly for the 112 HP 1500 cc petrol model while the revolutionary new 125 HP, 999 cc petrol model will cost Rs. 7.90 lakhs. 

But the former is the base Ambiante model while the latter is for the top trim Titanium model that also has an automatic AC, multi information computer, music system, leather wrapped steering, more chrome, driver seat adjustment, driver armrest, reclining rear seats and several other goodies. There is also a 91 HP, 1500 cc Ambiante diesel option priced at Rs. 6.69 lakhs and a 1500 cc Titanium petrol model with automatic gears at Rs. 8.90 lakhs. 

Source: Zee Business

Unilever raises stake in Indian unit to 67 per cent

Anglo-Dutch consumer goods company Unilever said it had acquired a little over two-thirds of Indian unit Hindustan Unilever following the close of a voluntary tender offer, falling short of its plan to raise its stake to as much as 75 per cent.

Shareholders of Hindustan Unilever, India's largest consumer goods maker, tendered 319.7 million shares to the offer, taking Unilever's holding in the unit to 67.28 per cent from 52.48 per cent, Unilever said in a statement.

Unilever, which makes products including detergent, soap, margarine and ice cream, paid 600 rupees per share, valuing the transaction at about 2.45 billion euros.

Earlier this year, Unilever said it planned to pay up to $5.4 billion to raise its stake in Hindustan Unilever to as much as 75 per cent, as part of a strategy to increase its presence in fast-growing emerging markets.

Copyright: Thomson Reuters 2013

Government to gain Rs. 13,000 crore from gas price hike

The government will gain about $2.2 billion (about Rs.13,000 crore) in higher taxes and profit share from its decision to nearly double natural gas prices to $8, Bank of America Merrill Lynch said in a report.

The Cabinet Committee on Economic Affairs (CCEA) had on June 27 approved raising natural gas prices from April 2014 to an average of prevailing rates at international benchmarks and cost of imported LNG into the country. The indicative price in April is likely to be $8 per million British thermal unit as against $4.2 currently.

State-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd, which accounts for bulk of natural gas produced in the country, will gain an additional Rs. 18,100 crore ($3.1 billion) annually, BofA Merrill Lynch said in the report.

About 65 per cent of ONGC-OIL's rise in revenue from gas price hike would go to the government as higher royalty, income tax, dividend and dividend tax.

"65 per cent of it ($2 billion) would go to the government. Rise in KG D6 gas price of Reliance Industries would also boost government royalty and income tax revenue by $200 million," it said.

This "$2.2 billion revenue rise from gas price hike would be used to fund rise in subsidy", it said.

The report said Finance Minister P Chidambaram had while announcing the CCEA decision stated that no decision has been taken on the input price of gas to user industries of power and fertiliser.

"Although no decision on input price for consumers has been taken, subsidies may be considered for some. The investor concern, therefore, is that subsidies to gas consumers like power producers could imply lower gas price to PSU gas producers - ONGC and OIL," it said.

Stating that some gas consumers are already subsidised by the government, it said, "We believe that even in future the government would bear any rise in subsidy. In our view, the rise in government revenue ($2.2 billion assuming gas price goes up to $8) from gas price hike would fund any rise in subsidy."

It said if the producers were to bear the subsidy and effectively get a lower gas price then there was no incentive to invest more in exploration and production, which is the main reason for the gas price hike.

Gas consumers in North East and fertiliser producers are subsidised even now. This subsidy is borne by the government and it does not mean lower gas price for ONGC/OIL.

Consumers in North East pay 60 per cent of prevailing gas price while OIL, the main gas producer in the region, collects balance 40 per cent of the gas price from the government.

"The proposed gas price hike is not the first gas price hike. Gas price was hiked in 2005 and has gone up by 2.6 times in FY10-13. Subsidies went up when price hikes were made and were borne entirely by the government," it added.

SOURCE: ndtv Profit

Why Egypt crisis, weak rupee may raise your petrol bill

Petrol prices are likely to go up further despite three hikes in June, which have almost negated the four reductions this year that had brought down the rates to Rs. 63 at the beginning of May.

So far the sustained increase in fuel prices was on account of the sharp depreciation in the rupee, which hit a record low last week. However, Egypt's unfolding political crisis has emerged as the latest trigger that may send fuel bills northwards.

Benchmark crude for August delivery traded at the highest since early May last year amid widespread protests in Egypt for President Mohamed Mursi's resignation.

Egypt is not an oil producer but its control of the Suez Canal - one of the world's busiest shipping lanes, which links the Mediterranean with the Red Sea - gives it a crucial role in maintaining global energy supplies.

The rupee's fall below 60 today will further weigh on fuel prices as oil marketing companies have to pay for crude in dollars.

In June, petrol prices were hiked thrice as falling rupee made imports costlier. Oil firms had on June 1 raised prices by 75 paisa, excluding VAT, and followed it with a Rs. 2 per litre increase on June 16. On June 28, petrol prices were hiked by Rs. 1.82 a litre. The government deregulated petrol prices in June 2010.

Diesel price, too, were hiked by 50 paise per litre earlier this month in accordance with the government mandate for small doses of increases every month till entire losses on the fuel are wiped out.

Despite the sixth increase in diesel rates, oil firms are losing Rs. 8.10 per litre on the nation's most consumed fuel.

"Under-recovery on sale of retail diesel has been steadily increasing mainly due to depreciation in rupee coupled with increasing international prices. Even after the aforesaid increase, there shall still be an under-recovery (loss) on retail diesel of Rs. 8.10 per litre," Indian Oil Corporation, India's biggest refiner said in a statement.

Oil stocks were down sharply, partly on profit taking after recent gains. IOC traded 3.7 per cent lower at Rs. 227.80, while BPCL declined 3.4 per cent to Rs. 359.20 as of 11.30 a.m.

"Crude oil prices rallied up, and now some airline shares are down quite significantly," said Dickie Wong, executive director of research at Kingston Securities Ltd. in Hong Kong.

Airlines are most immediately affected by changes in energy prices since fuel accounts for a large share of their expenses, but a sustained rise in oil prices could have a ripple effect on the global economy which is already beset by a recession in Europe and a shaky recovery in China.

Aviation stocks traded lower in India too. Budget carrier SpiceJet traded 2.5 per cent lower at Rs. 27.65, while grounded carrier Kingfisher fell over 1 per cent.

(With inputs from agencies)

Source: ndtv pROFIT

India has bizarre rules for airline operations: Tony Fernandes

Indicating its intentions to fly abroad very soon, proposed airline AirAsia India on Wednesday trashed the "bizarre" policy of allowing carriers to operate international flights only after five years of domestic operations.

"These are bizarre rules ... That you can't fly abroad before five years and 20 aircraft (fleet). ... That rule makes no sense. It is a negative for the Indian airlines.

"I, as a one-plane airline in Malaysia, can fly to India. India is the only country which has such a rule," Air Asia Group CEO Tony Fernandes said here.

Maintaining that the Indian airline industry has "not done a good job" to explain to the government the importance of aviation for the economy, he said "it is a shame that India has lost many years. See what new airlines in the region have done. India has lost because of vested interests even though it has a lot of talent and economic activities."

Asked to elaborate what he meant by "vested interests", Fernandes said "too many people have vested interests as they don't think what India as a country needs. There is 100 per cent FDI in telecom. Government should tell the people that aviation is good for the people."

"Most of these negativities come from within the industry and ultimately fails the people. ... It is an incredibly self -interested industry," he said.

Speaking on AirAsia India which is being backed by his carrier, the Tata Group and Telestra Tradeplace of Arun Bhatia, he said it would offer cheap tickets by charging for various services including food and preferred seats, besides taking "aggressive" cost-cutting measures.

"There is no such thing as free. There is no free food. If you want a nicer seat, pay for it. We will offer the lowest denominator cost by unbundling the fare," he said.

But AirAsia India would offer 15 kgs of free baggage allowance with each ticket, as per rules here. "(European low -cost carrier) Ryan Air charges for washrooms. We won't do that but we will give you options," he said. 

"I would not see (the fares) being too costly to drive away customers and neither too cheap not to meet the costs," the AirAsia chief said, adding that his airline model in Malaysia -- which has the tagline of 'everyone can fly'-- attracts even the "taxi and bus driver".

Asked how cheap tickets would be, Fernandes "you will know when we do our first flight. We can go low. Our fares from Kuala Lumpur to Kochi is lower than Kochi-Mumbai."

AirAsia India, which would have a fleet of Airbus A-320s, would invest USD 30 million to begin with, he said, adding that he was looking forward to low-cost airports across India, connecting many more routes and getting into the Maintenance, Repair and Overhaul (MRO) business in the country.

Among the steps to be taken on "aggressive cost-cutting" would be ticketing through the internet, using Tata's retail shopping chain, introducing pre-paid cards on which air tickets can be purchased, apart from travel agencies.
His Group would also enter India's insurance market through 'Tune Money', a Malaysian financial services company that offers insurance and loyalty card products. "But this venture will be separate from the airline business."

AirAsia India CEO Mittu Chandilya, who was accompanying Fernandes, said he was bullish on India's aviation sector and it was his dream to turn AirAsia India into a bigger entity than the AirAsia Group. "There is a huge opportunity ... though I can understand the costs and other issues."

Observing that this was the "right time" to enter the Indian market, Fernandes said "silly capital has gone out. Eight years ago, I said I will never come to India as there are crazy guys in this business who had too much money to throw away. They have lost all their money now. There is a bit of sensible business now."

AirAsia top brass and its advisor Ratan Tata yesterday met several ministers in an effort to speed up clearances for AirAsia India which they aim to launch by October. 

Source: PTI

US says oil market can cope with more Iran export cuts

The top U.S. energy official said world oil markets could cope with further cuts in Iran's oil exports from tighter sanctions over its nuclear programme as rising supply from the United States and Iraq offsets the loss.

U.S. lawmakers are embarking this summer on a campaign to deal a deeper blow to Iran's diminishing oil exports, and analysts say the ultimate goal could be a near total cut-off.

But U.S. Energy Secretary Ernest Moniz said growing U.S. and Iraqi oil output meant Iran was not now a "dominant player in the market" and that there was "quite a bit of potential for increased production to offset any further reduction".

There is also substantial reserve capacity in major OPEC producers such as Saudi Arabia, he said.

"So I would think that with further sanctions, the markets could be quite resilient to that," said Moniz, who took office last month.

From a technical point of view, "we can certainly manage a further reduction of Iranian exports", he said in an interview in Vienna.

Western sanctions aimed at choking the flow of oil money into Iran and forcing Tehran to negotiate on its controversial nuclear programme slashed crude exports to 700,000 barrels a day in May, the lowest in decades, according to industry sources.

But crude prices are still lower than they were a year ago.

Any further squeeze in Iran's oil exports could risk antagonizing China and India, the biggest remaining buyers of Iranian crude, and could push oil prices higher in a hit to the global economy.

Both political parties in the U.S. Congress are pressing for tougher sanctions, betting that a U.S. oil boom and ample global supply will prevent prices from spiking.

Iran says its nuclear programme is a peaceful bid to generate electricity, but Washington and its allies suspect Tehran is seeking the capability to make nuclear weapons.

"Action" on gas export applications 

Moniz also said he expected a "fair amount of action" by his department in 2013 in evaluating applications by U.S. firms to export natural gas.

Companies hoping to ship gas abroad have been frustrated by lengthy delays and rule changes as they await Department of Energy approval of their applications.

"I'm planning to go through them as rapidly as I can," he said.

Last week, U.S. President Barack Obama included a robust endorsement of natural gas use around the world as he sought to revive his stalled climate change agenda.

But how much the United States will supply remained unclear as more than a dozen companies await approval to sell excess gas to countries such as India and Japan, where it will fetch higher prices than in the domestic market.

The Energy Department has so far approved two projects to ship liquefied natural gas (LNG).

"I've committed to start that process expeditiously, and I certainly expect to have substantial numbers of that (evaluation of export license applications) this year," Moniz said.

The surge in shale gas production has helped make the United States a leading natural gas producer and potentially a major exporter. But some manufacturers and lawmakers have warned that a rapid push to export LNG could lead to a rise in U.S. gas prices and harm consumers and energy-intensive industries.

Moniz said applications would be handled on a case-by-case basis and suggested he would not change the order in which his department rules on applications - a policy made in midstream that put some players at a disadvantage.

"My intent is to move forward with the queue as it is spelled out," he said, making clear he did not agree with a major LNG trade group, which said it was unlawful. "Our lawyers feel it is certainly completely rational."

If the Department of Energy waits about two months between each export decision, as Acting Assistant Secretary for Fossil Energy Christopher Smith has signalled, projects near the end of queue might not get a DOE permit before late 2015.

source: http://english.ahram.org.eg

India cuts Iran oil imports 42%, takes Venezuela and others

India cut its Iranian oil imports by more than 40 percent in the first five months of the year, replacing the crude with shipments from Venezuela, Iraq and Oman, and pushing Iran down four places to seventh among its suppliers.

India's imports of Iranian oil for May dropped 12.2 percent from a year ago to 213,500 barrels per day (bpd), tanker arrival data compiled by Reuters from trade sources shows.

The cuts underline the effectiveness of US and European sanctions aimed at Tehran over its suspected pursuit of nuclear weapons. Those measures reduced Iran's oil exports to the lowest in decades in May and have cost it billions of dollars in lost revenue per month since early 2012.

Washington is now seeking to cut Iran's oil shipments further through tighter sanctions.

The Middle Eastern country's economy has been battered as a result of the sanctions aimed at ending its nuclear activities, though there are hopes of better relations with the West after the election of moderate cleric Hassan Rohani to its presidency.

But with Iran's supreme leader, Ayatollah Ali Khamenei, still deciding state policy, there is not expected to be a rebound in oil exports anytime soon.

While India's Iranian imports for May were up more than 80 percent from April, the year-to-date total was down 41.8 percent, the tanker data showed.

Iran's share of India's total oil imports dropped to 5.5 percent over the January to May period, down from more than 10 percent in the same period last year, the data also showed.

Earlier this month, Washington granted its third 180-day waiver to Asian countries including India for significantly reducing Iranian oil imports in the six months to May.

Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals  halted their Iranian oil purchases in April as it became difficult to insure refineries processing oil from the OPEC member, making the largest contribution to India's cuts this year.

Indian insurers worried about running afoul of sanctions have said they will not be able to pay claims at plants processing Iranian crude.

That has left the country's biggest refiner, state-owned Indian Oil Corp - whose insurance coverage is due for renewal only in November - and private refiner Essar Oil  as Iran's only Indian clients, according to sources.

The data showed IOC bought two very large crude carriers of Iranian oil in May, and industry and government sources said the state refiner is not planning to lift any more Iranian crude until the fourth quarter of 2013.

This means Essar Oil would be Iran's sole customer in India from June to later this year, unless other Indian refiners find a way to insure plants processing Iranian crude or sanctions are eased.

Other Asian countries have also been showing steady cuts in their Iranian crude imports. Customs data on Saturday showed that South Korea had cut its May oil imports from Iran by 8.3 percent from a year ago.

India imported nearly 80 percent more oil from Latin America in the January to May period as it cut its dependence on Iran. The region accounted for about a fifth of India's overall imports, up from 12 percent in the same period a year ago.

Overall, Asia's third-largest economy shipped in 12.6 percent more oil in May than a year ago, while imports for the January-May period rose about 8.8 percent, the data showed.

Source: moneycontrol.com

US says oil market can cope with more Iran export cuts

The top US energy official said he believed the oil market could cope with any further reduction of Iran's oil exports from the tightening of sanctions on Tehran over its nuclear programme.

US Energy Secretary Ernest Moniz also said on Sunday he expected a "fair amount of action" by his department in 2013 in evaluating applications by US firms to export natural gas.

Companies hoping to ship gas abroad have been frustrated by lengthy delays and rule changes as they await Department of Energy approval of their applications.

"I'm planning to go through them as rapidly as I can," Moniz said in an interview in Vienna.

As for Iran, US lawmakers are embarking this summer on a campaign to deal a deeper blow to its diminishing oil exports, and analysts say the ultimate goal could be a near total cut-off.

This could risk antagonizing China and India, the biggest remaining buyers of Iranian crude, and could push oil prices higher in a hit to the global economy.

Moniz said Iranian exports were not now a "dominant player in the market", and was offset by increased production in the United States and in Iraq as well as substantial reserve capacity in some of the major OPEC producers such as Saudi Arabia.

"So I would think that with further sanctions, the markets could be quite resilient to that," said Moniz, who took office last month. From a technical point of view, "we can certainly manage a further reduction of Iranian exports", he added.

US and European Union sanctions aimed at choking the flow of oil money into Iran and forcing Tehran to negotiate curbing its controversial nuclear programme slashed its crude exports to 700,000 bpd in May, the lowest in decades, according to industry sources and tanker-tracking data.

But crude prices are still lower than they were a year ago.

Iran says its nuclear programme is a peaceful bid to generate electricity. But Washington and its allies suspect Tehran is seeking the capability to make nuclear weapons.

Both parties in the US Congress are pressing for tougher sanctions, betting that a resurgence in US oil output and signs of ample global supply will prevent prices from rising.

Moniz said there was "quite a bit of potential for increased production to offset any further reduction" of Iranian exports.

"Action" On Gas export applications

Last week, US President Barack Obama included a robust endorsement of natural gas use around the world as he sought to revive his stalled climate change agenda.

But how much the United States will supply remained unclear as more than a dozen companies await approval to sell excess gas to countries such as India and Japan, where it will fetch higher prices than in the domestic market.

The Energy Department has so far approved two projects to ship liquefied natural gas (LNG).
"I've committed to start that process expeditiously, and I certainly expect to have substantial numbers of that (evaluation of export license applications) this year," Moniz said.

The surge in shale gas production has helped make the United States a leading natural gas producer and potentially a major exporter. But some manufacturers and lawmakers have warned that a rapid push to export LNG could lead to a rise in US gas prices and harm consumers and energy-intensive industries.

Moniz said applications would be handled on a case-by-case basis and suggested he would not change the order in which his department rules on applications - a policy made in midstream that put some players at a disadvantage.

"My intent is to move forward with the queue as it is spelled out," he said, making clear he did not agree with a major LNG trade group, which said it was unlawful.

If the Department of Energy waits about two months between each export decision, as Acting Assistant Secretary for Fossil Energy Christopher Smith has signalled, projects near the end of queue might not get a DOE permit before late 2015.

Source: moneycontrol.com