India could announce steps to curb fuel consumption on Sept. 16, Foreign Minister Salman Khurshid said yesterday, in a bid to cut the biggest item in the nation’s import bill and help support a rupee skittering just above record lows.
The world’s fourth-biggest energy user is widely expected to announce a steep hike in diesel prices soon, as it looks to cut oil costs by nearly US$20 billion. Rising global prices of crude and the rupee’s slide have left India facing an oil bill potentially 50 percent higher than on May 1.
“No matter what happens, we will have to cut down on fuel consumption,” Khurshid told business channel CNBC TV18. “You can’t keep subsidizing costs of fuel and not restrict the use of the fuel.”
Indian Oil Minister M. Veerappa Moily could unveil fuel-saving measures when he returns from a trip next week to Japan and South Korea. Khurshid gave no details of the possible steps.
Moily has already suggested ways to cut fuel import costs in letters to the prime minister and finance ministry a week ago, ranging from a street theater campaign encouraging energy conservation to stepping up imports from Iran that India pays for in rupees.
However, India, where energy consumption per person is among the lowest in the world, has little elasticity in its fuel use as it tries to power exports and agriculture to help boost its economy and stave off a currency crisis.
More than 40 percent of fuel demand, or about 1.4 million barrels per day, is for diesel, and the bulk of that is used by trucks, farmers and industry, which needs back-up generators to cope with the country’s frequent power blackouts.
The government subsidizes diesel prices, which are now about 10 rupees (US$0.15) a liter below estimated market rates. Gasoline prices are not subsidized.
An increase of 5 rupees per liter on diesel could save about US$4.3 billion in oil costs, Reuters calculations show. Total subsidies on fuel amount to about US$25 billion a year and India’s crude oil import bill was US$144 billion last fiscal year.
Khurshid said Indians were increasingly realizing the “inevitability” of moving away from government-controlled prices.
“That’s beginning to happen, but has political implications,” he said.
Fuel price hikes generally provoke stiff resistance from opposition parties and any hike now is expected to draw a bigger protest, with a general election due next year. The election must be held by May.
Diesel demand has edged down 1.1 percent between April and July, Indian Oil Secretary Vivek Rae said, largely due to reduced consumption by trucks as heavy monsoon rains in June and July hit road transport. The rains also reduced the need for farmers to run irrigation pumps.
However, overall products use rose 1.1 percent between April and July, Rae said, with gasoline consumption up 11.4 percent. Two-wheelers, which run only on gasoline, are the backbone of private transport in India, where middle-class incomes are still too small for most families to afford cars.
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
BYPASSING CHINA TARIFFS: In the first five months of this year, Foxconn sent US$4.4bn of iPhones to the US from India, compared with US$3.7bn in the whole of last year Nearly all the iPhones exported by Foxconn Technology Group (富士康科技集團) from India went to the US between March and last month, customs data showed, far above last year’s average of 50 percent and a clear sign of Apple Inc’s efforts to bypass high US tariffs imposed on China. The numbers, being reported by Reuters for the first time, show that Apple has realigned its India exports to almost exclusively serve the US market, when previously the devices were more widely distributed to nations including the Netherlands and the Czech Republic. During March to last month, Foxconn, known as Hon Hai Precision Industry
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) yesterday expressed a downbeat view about the prospects of humanoid robots, given high manufacturing costs and a lack of target customers. Despite rising demand and high expectations for humanoid robots, high research-and-development costs and uncertain profitability remain major concerns, Lam told reporters following the company’s annual shareholders’ meeting in Taoyuan. “Since it seems a bit unworthy to use such high-cost robots to do household chores, I believe robots designed for specific purposes would be more valuable and present a better business opportunity,” Lam said Instead of investing in humanoid robots, Quanta has opted to invest
RSS