|Thursday, March 30, 2000,
Energy-hungry Asia jubilant at
BHEL, BBMB join hands
jubilant at OPEC decision
TOKYO, March 29 OPECs agreement to raise oil output should nip in the bud the threat of a pick-up in imported inflation in energy-hungry Asia as the regions recovery gathers pace, economists said today.
They said the pact, agreed by nine members of the Organisation of Petroleum Exporting Countries except Iran, would also reduce the risk of a sharp rise in interest rates in the USA with its spillover effects in Asia.
Saudi Oil Minister Ali al-Naimi said he hoped the 1.45 million barrel-per-day increase would push crude prices down to $ 20-25 a barrel compared with recent peaks above $ 30.
This comes at a time when we were beginning to see some upward pressure on the inflation front, so that will definitely at least help to moderate expectations and fears going forward, said Tzu Ping Tan, an economist with J.P. Morgan in Singapore.
Asia has coped remarkably well with the tripling of oil prices over the past year. The huge slack created by the regions 1997 economics crisis and generally firming currencies have put a damper on price pressures.
For example, Japan, which imports nearly all its oil, is still suffering from falling prices. But Tan said evidence was starting to come through in countries such as Thailand of oil-push inflation that the OPEC deal, if implemented, would alleviate.
Graham Courtney, who covers Asian economics for Warburg Dillon read in Tokyo, agreed.
Its good news for the entire region. Those countries where there hasnt been any structurally based fear of demand-push inflation nevertheless did have this cloud of import price-induced inflation over them, he said.
Perhaps if this agreement works out that little cloudlet will be dissipated.
Not everyone is singing and dancing.
Not everyone buys into the good news story.
BNP Paribas takes the view that the 7 per cent output hike will not have much of an impact.
If anything, were not going to see prices falling dramatically, therefore were not going to sing and dance in the streets, said Phillip Smyth of the banks Hong Kong office.
South Korea and Taiwan, which are far ahead on the recovery path, would be most vulnerable to importing inflation if oil prices did in fact stay high, economists said.
Courtney at WDR, who is worried that those two economies are recovering too quickly for comfort, acknowledged that a lower oil bill would enable northeast Asia to step up already strong imports of capital goods. This could open up the possibility of a repeat of the over investment that contributed to the 1997 crisis.
The high oil price perhaps didnt make Asia think twice about its domestic demand as I certainly would have wanted them to, Courtney said.
Cheaper oil would be good news for Asias trade balances, with the exception of oil exporters Indonesia and Malaysia.
The countries that stand to benefit most would be India, South Korea and Hong Kong. Indias fuel imports as a share of total imports in 1999 came to 20.4 per cent, Koreas were 18.1 per cent and Hong Kongs were 15.9 per cent, J.P. Morgan said.
Looking beyond the direct impact on inflation and trade, Neil Saker of S.G. Securities in Singapore said the OPEC deal was positive for Asia in that it reduced the risk of an inflationary surge in the USA.
The problem for
Asia would be if oil prices went up a lot and that
affected stability in the West and they had to have
interest rate hikes etc. But clearly thats not
going to happen, Saker said. So it takes away
some uncertainty, which is clearly good news.
NEW DELHI, March 29 (PTI) The OPEC decision to increase crude production will reduce Indias import bill from estimated Rs 65,000 crore and have a positive impact on the oil pool account next fiscal if the international oil prices stabilise below $ 25 a barrel.
Industry analysts said a one dollar per barrel fall in the international crude oil price is likely to reduce Indias annual oil bill by over Rs 2,500 crore.
Analysts expect the oil prices to fall by one to two dollars per barrel.
The Petroleum Ministry had projected the oil import bill for the year 2000-01 to touch Rs 65,000 crore based on an average crude price of about $ 25 per barrel.
OPECs decision is bound to have an impact on India as it would bring down the prices and will have an effect on the oil import bill also, The Director of Planning of Oil Coordination Committee (OCC), Mr P.K. Agarwal, told PTI.
India is likely to import a total of over 100 million tonnes of crude and petroleum products during 2000-01. Of this about 95 per cent would be crude oil as various refineries are likely to go in for expansion during this period.
The fear of shortage, which was there earlier, is over and with the increase in production the prices will come down but to what extent needs to be seen, Agarwal said.
The fall in prices would ease the pressure on the oil pool account as it has already subsidising diesel by about rs 1.93 per litre. Even kerosene and LPG were subsidised heavily despite the recent steep hike in prices.
The cut in production of crude by OPEC last year had taken international oil prices to an all-time high of $ 30 a barrel in February 2000 from nine dollars a barrel in March, 1999.
ABUJA (Nigeria) Mar 20 (UI) In a major step to establish energy security, India today succeeded in ensuring that Nigeria will supply six million tonnes of crude oil annually at the official sale price (OSP), unaffected by the uncertainties and fluctuations in the world oil market.
This is the first time that India has reached such an understanding with any country which would mean that the crude price will remain constant and be generally lower than the market price.
Since the Nigerian crude has a low sulphur content. Indian imports from this country have been steadily rising and currently stand at 15 million tonnes, one sixth of its total imports.
The announcement that
Nigeria, one of the largest producers of oil in the
world, will supply crude oil to India from the middle of
this year was made after a meeting here between visiting
External Affairs Minister Jaswant Singh and Nigerian
Presisent Olusegun Obasanjo.
create five lakh jobs
NEW DELHI, March 29 A number of development programmes in the infrastructure and power sector will be undertaken and industry friendly labour laws formulated to generate more than five lakh jobs in Haryana, said the Chief Minister, Mr Om Prakash Chautala, here today.
Speaking at the interactive session at the PHDCCI on Haryana vision and agenda for action net 100 days, he said the State has already issued a new industrial policy with thrust on single window system to solve the problems of industrialists, simplify procedures along with better law and order situation in the State.
Mr Chautala said the State Government has invited private investment in power generation projects and Yamunanagar Thermal Power Station is being established under this policy.
The Chief Minister assured all kinds of possible help to multinational companies for setting up units in the State.
An express way is also under consideration which will connect Kundli, Faridabad and Gurgaon for easier exports from Indira Gandhi Airport.
Information Technology will be introduced in all the schools as a subject to generate job opportunities to check migration of labour.
Mr Chautala said the State would soon revive the lottery system online basis to earn revenue for the development of the State.
The State Government has decided to privatise tourism complexes and a policy announcement would be made shortly, said, adding that land on 33 year lease would be offered to private sector for developing tourist projects.
He said the Government was finalising a master plan for Hisar 2021 to accommodate one million people and this city would be counter magnet to Delhi.
The Chief Minister said he favoured subsidised power for agriculture and stated that all decisions of Haryana Electricity Regulatory Commission would be honoured by the four generation, transmission and distribution companies.
export organisation set up
NEW DELHI, March 29 The CII and the Department of Scientific and Industrial Research today signed an agreement to set up the Technology Export Development Organisation (TEDO).
The objective of TEDO is to promote technology intensive exports and technology exports from India, a release said today.
The potential areas of
technology exports include computers, software,
telecommunications, civil aviation, new materials,
agrotech, chemicals and allied fields, micro-electronics,
biotech, envirotech, plant designing, detailed
engineering and turnkey project.
CHANDIGARH, March 29 Bharat Heavy Electricals Limited (BHEL) and the Bhakra Beas Management Board (BBMB) have signed a memorandum of understanding to undertake the renovation, modernisation and uprating of old hydroelectric power stations.
BHEL and BBMB will synergise each others expertise for execution of such plants. This was stated by Mr K.G. Ramachandran, CMD, BHEL, and Maj-Gen R R Oberoi, YSM, Chairman, BBMB, at a meeting yesterday.
MUMBAI, March 29 (PTI) General Insurance premiums in most cases will come down by 20 per cent on an average when the Tariff Advisory Committees (TAC) revised norms on All-India Fire Tariff come into force on May 1.
Other salient features of the new norms include one policy instead of three for all types of risks, increase in number of accidents covered from six to 12 and a separate section on add on covers, low claims and discounts, TAC Secretary A.R. Dudani said in a statement here today.
Dabur India drags Nestle to CLB
NEW DELHI, March 29 (PTI) Dabur India Ltd (DIL) has taken Swiss multinational Nestle SA to the Company Law Board (CLB) and asked the board to appoint an independent administrator to look into the affairs of their joint venture Excelcia Foods Ltd. In its petition Dabur has asked CLB that the Board of Directors of Excelcia be superseded with an independent administrator.
Max India clears 1:1 bonus
NEW DELHI , March 29 (TNS): Max India Limited today approved the issue of bonus shares in the ratio 1:1. In an extraordinary general meeting of the company here today, an employee stock option scheme (ESOP) was also announced to the extent of 5 per cent of the share capital of the company in any one year to employees, wholetime and Managing Directors and non-executive directors of the company and its subsidiaries.
Whirlpool for tie-up with Amtrex, Voltas
NEW DELHI, March 29 (PTI) Whirlpool is negotiating with leading air conditioning manufacturers including Amtrex and Voltas for forging a strategic alliance to enter the domestic AC market, sources said here today. Sources, however, confirmed that WIL was holding discussions with Ahmedabad-based Amtrex and Hyderabad-based Voltas besides others of the proposed alliance.
Enkay Texofood to sell textile division
NEW DELHI, March 29 (PTI) Mumbai-based Enkay Texofood Industries Ltd, manufacturers of Onjus, is selling its textile division to Adinath Filament Ltd for a consideration of Rs 71 crore, a top company official said. However, there would be no cash transaction involved in the sale as Enkay Texofood would transfer debts of the textile division to Adinath, which would liquidate it.
BLB enters software business
NEW DELHI, March 29 (TNS): A leading stock broking company BLB Limited, has entered into MoU with a leading US based software firm and has acquired SORD Systems to enter the software business. The firm will develop programmes for business-to-business and business-to-commerce model, a company release said today.
IEC tie-up with Malaysian University
CHANDIGARH, March 29
(TNS) IEC Softwares has signed a contract with
University Putra Malaysia, the largest university in
Malaysia. This is the first time that a Malaysian
university has signed a contract with an Indian company
to impart high-end IT education.
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