- Gary Dorsch, via Safe Haven: Is Crude Oil a “Bubble” Ready to Burst?
India is Asia’s third-biggest oil consumer, and imports 70% of its petroleum needs. India’s big-3 oil refiners Indian-Oil, Hindustan Petroleum and Bharat Petroleum, have borne the brunt of the crude oil spiral, are expected to report combined losses of 1.8 trillion rupees for the past year, from selling fuel below cost.
India’s Petroleum ministry is pitching for a reduction in the taxes and duties that account for about 55% the retail price of petrol. But the government earned a whopping 71,000 billion rupees in 2006-07 from taxes and duties on petroleum products last year.
The massive build-up of FX reserves can help India to cope with major external shocks, such as the surge in oil prices. In the past sixteen months, India’s imported 121 million tons of crude oil crude oil, up 9% from the same period a year earlier, and its oil import bill jumped 40% to $68 billion.
The Reserve Bank of India will buy the securities, issued to oil companies by the government as compensation for selling fuel below cost, through designated commercial banks and provide equivalent amount of foreign exchange, it said in a faxed statement in Mumbai. Such purchases will be subject to a limit of 10 billion rupees ($235 million) a day.
The proposed market operations were aimed at minimizing the potential adverse consequences for the financial markets due to a rally in oil.
The increase in oil prices raised the value of India’s oil imports to a record $8.6 billion in March.
Finally putting those $300B+ forex reserves to good use?
- Hindu Business Line: SEBI amendments to FII norms to discourage sub-accounts
. . . a newly-established fund can now apply to be registered as an FII, provided the track record of the investment manager of the fund, who has promoted it, is taken into consideration.
The other relaxation is that university funds, endowment funds, charitable trusts and societies may be considered for registration as FIIs, even if they are not regulated by any foreign regulatory authority.
A sub account is now “any person resident outside India, on whose behalf investments are proposed to be made in India by a foreign institutional investor and who is registered as a sub account under these regulations.”
Asset management companies, investment manager/advisor, institutional portfolio manager set up or owned by NRIs shall be eligible to be registered as FII subject to the condition that they shall not invest their proprietary funds.