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Bloodbath in oil market; crude tumbles 30%

The current crude oil prices are just marginally higher than the decadal low of $26 a barrel in early 2016 with analysts fearing that it may touch that level soon.

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New Delhi, March 9 : The bloodbath in the oil market has continued into the new week with crude oil prices slumping to around 30 per cent on Monday to just about $30 a barrel after Saudi Arabia shocked the market by launching a price war against one time ally Russia.

Late last week, talks between oil cartel Organization of Petroleum Exporting Countries (OEPC) and Russia collapsed as the two sides failed to agree on an output cut deal. This pushed Saudi Arabia, the world’s largest oil producer, to cut its crude prices and announce increase production leading to a mayhem in an already over supplied oil market.

Crude is trading down 22 per cent to $32 a barrel. Brent crude, the global benchmark, has also plunged 22 per cent to $35 a barrel. Both oil contracts are on track for their worst day since 1991 Gulf War.

US oil prices crashed as much as 27 per cent to a four-year low of $30 a barrel.

The fear in the market now is that oil prices may crash further as Saudi Arabia is taking aggressive stance and is expected to flood the market with crude in a bid to recapture market share. Analysts have said that Saudi Arabia had slashed its April official selling prices by $6 to $8 a barrel in a bid to retake market share and heap pressure on Russia.

The global developments on oil bore well for India that imports 83 per cent of its domestic oil requirements. Analysts said that the country could save over $30-40 billion in its oil import bill if the current prices hold on for longer during 2020. This fiscals oil imports bill is also expected to fall from the gains on prices in the last two months of the financial year.

In a tweet on Sunday Kotak Mahindra Bank managing director and CEO Uday Kotak said: “Amidst turbulence and the virus, some good news – oil at $45/barrel. Recent $20 drop saves India $30 billion per annum. Also global interest rates have collapsed making money cheap. Let’s leverage these for policy to boost growth.”

The current crude oil prices are just marginally higher than the decadal low of $26 a barrel in early 2016 with analysts fearing that it may touch that level soon.

The failure of OPEC-Russia deal on production cuts has the genesis on growing prowess of the United States in oil export market. Russia has been dropping hints that the real target is the US shale oil producers as any production cuts by them helps US producers extra space in the market. OPEC led by Saudi Arabia wants production cuts to be expanded in an oversupplied market to prevent further erosion in oil prices that is also facing huge demand squeeze aggravated by the spread of Coronavirus.

The failure of talks has also resulted in a crash of Stock markets across the Gulf. Saudi Arabia’s stock exchange, the Tadawul, was down 7.7 per cent in afternoon trading on Sunday. The Abu Dhabi index fell 5.8 per cent, Dubai’s Financial Market General Index was down 7.47 per cent.

Shares of Saudi state oil giant Aramco traded below their original IPO price for the first time on Sunday, at 30.90 riyals ($8.24) in Riyadh compared to the listing price of 32 riyals in December. That’s down 6.36 per cent on the day.

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ABVP man clones currency with Godse image

In the same post, Shukla has addressed Nathuram Godse as Mahatma and Pujya Pandit Nathuram Godse Amar Rahein (Long Live Nathuram Godse).

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Nathuram Vinayak Godse

Bhopal, May 25 : A man from Sidhi district, claiming to be a member of Akhil Bharatiya Vidyarthi Parishad (ABVP) – student outfit of the BJP – has cloned a Rs 10 currency note replacing Mahatma Gandhi’s image with that of his assassin Nathuram Godse.

The activist who identified himself as Shivam Shukla while uploading the post on Facebook hailed his hero: “Long Live Nathuram Godse” to mark his 111th birth anniversary on May 19.

Police have sought to track him down with the help of cyber experts to take action into the matter.

The shocking incident was revealed two days after the saffron outfit Hindu Mahasabha celebrated the 111th birth anniversary of Godse by garlanding his portrait and lighting up diyas around the portrait at the Mahasabha’s office in Gwalior.

Congress’ student wing, National Students’ Union of India (NSUI), has filed a complaint against Shukla on the incident.

ABVP also filed a complaint against the NSUI for “falsely dragging the name of ABVP” into the issue.

Shukla has even changed Mahatma Gandhi’s famous couplet to praise Gandhi’s assassin. Shukla wrote, “Raghupati Raghav Raja Ram, desh bacha gaye Nathuram (Nathuram saved the country).

In the same post, Shukla has addressed Nathuram Godse as Mahatma and Pujya Pandit Nathuram Godse Amar Rahein (Long Live Nathuram Godse).

Sidhi district police superintendent RS Belvanshi said, “A complaint was submitted to Sidhi Kotwali. The cyber cell of district police has been tasked with investigating the matter. Action will be taken in the matter once the inquiry is completed. “

“Our teams went to Shivam Shukla’s house on Friday, but he remains untraceable,” Belvanshi said.

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ITC to acquire spice manufacturer Sunrise Foods Pvt Ltd

It also noted that ITC’s Aashirvaad range of spices is already a market leader in Telangana and Andhra Pradesh.

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Sunrise Foods ITC Ltd

New Delhi, May 24 : ITC Ltd has entered into a share purchase agreement to acquire 100 per cent of the equity share capital of Sunrise Foods Private Ltd (SFPL), a company primarily engaged in the business of spices.

In a regulatory filing, ITC said that the proposed acquisition will augment its product portfolio and is aligned to the company’s aspiration to significantly scale up its spices business and expand its footprint across the country.

“ITC Ltd has entered into a Share Purchase Agreement (SPA) on May 23, 2020 to acquire 100 per cent of the equity share capital of Sunrise Foods Private Limited (SFPL), a company primarily engaged in the business of spices under the trademark ‘Sunrise’, subject to fulfilment of various terms and conditions as specified in the SPA,” it said.

It also noted that ITC’s Aashirvaad range of spices is already a market leader in Telangana and Andhra Pradesh.

The deep consumer connect and distribution strength of SFPL in the focus markets, together with synergies arising out of the sourcing and supply chain capabilities of ITC’s agri business and its pan-India distribution network, will provide significant value creation opportunities for the company, it said.

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No GST exemption to help businesses fight Covid-19 disruptions

The issue for GST exemption has surfaced particularly with respect to items needed in the fight against the pandemic: Ventilators, personal protection equipment (PPE), Covid-19 test kits, sanitisers, etc.

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GST Collection Down

New Delhi, May 23 : The Finance Ministry has ruled out GST waiver or deference to businesses as part of the economic relief package to help them cope with the situation arising in the wake of Covid-19 pandemic and the resultant nationwide lockdown.

In discussions within the ministry, it has been said that Goods and Sales Tax exemption or deferral is not required as it would not given any benefit to industry but seriously impact the revenues of both the states and the Centre.

With the Centre announcing a mega relief package of Rs 20 lakh crore as part of the Atmanirbhar Bharat Abhiyan, there have been oft-repeated demands for the GST wavier, this time for a period of six months. The argument given is that GST exemption would lead to revival of demand due to reduction in prices and hence benefit in the fight against Covid-19.

The government has provided exemption and moratorium on payment of various taxes and debt as part of the package.

Contrary to what is being suggested, government sources said on the condition of anonymity that GST exemption would seriously jeopardise the industry’s interests and not result in any significant gains to consumers.

Therefore, there is no point to exempt businesses from this tax that would lead to blocked input tax credit (ITC), resulting in increase in manufacturing cost and a higher price for consumers.

“Hopefully, the Centre is not considering the demand. Exemption of GST on the final product is never a good idea. It distorts the value chain. It does not necessary lead to reduction in prices. In fact, it adversely impacts domestic industry,” Najib Shah, former chairman, Central Board of Indirect Taxes and Customs (CBIC), told IANS.

The issue for GST exemption has surfaced particularly with respect to items needed in the fight against the pandemic: Ventilators, personal protection equipment (PPE), Covid-19 test kits, sanitisers, etc.

At present, the liability of the inputs “be it 5% or 12% or 18%” is more than offset when discharging the 5% or 12% GST liability on PPE or ventilator, the entire liability being ‘paid’ by the credit of taxes accumulated at the earlier stages of manufacture.

If GST is exempted, this credit facility will be unavailable, leading to higher final price of the equipment.

In the past also, when the GST exemption on sanitary napkin was allowed, it led to similar hardship for domestic manufacturers of sanitary napkins. Later, domestic industry complained of adversity.

It is also equally important to keep in mind that GST waiver provides much larger incentive for imports because imports do not come with any baggage of input side taxes compared with the domestic supply.

GST provides a level playing field to domestic industry vis-a-vis the imports.

Illustratively, waiver of tax on a mobile would mean that domestically produced mobile phone has suffered the taxes on its inputs, while the imported mobile phone does not. Hence, imported mobile would be cheaper, making the domestic one non-competitive.

“Any decision to review the GST rates cannot be taken unilaterally by the central government. It is the recommendation of the GST Council that prevails in respect of GST rates. With the situation of dire economic crises and states requiring resources more than ever to deal with the post Covid-19 pandemic situation, the Council may not have comfort of this option. It is an option that causes hardship to the businesses and the state finances, while providing virtually no relief to customer in the first place.”

States GST revenue may see steep fall of 80-90 per cent in April, the first full month of lockdown that saw business and economic activity coming to a standstill.

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