Fahad Khateeb, who runs a business in Mumbai that manufactures LED lights, is constantly monitoring the price of oil because of the direct impact it has on his profits.
“Oil prices are the backbone of the Indian economy and India in the last few months has seen quite a bit of price rises of petrol and diesel, and we as manufacturers directly feel the impact as raw materials become more expensive in terms of transportation,” says Mr Khateeb, the chief executive of Indilights, who is worried over the impact of rising oil prices on his business.
India’s demand for oil is huge, as the world’s third-largest importer of crude oil globally. With consumption of oil expected to continue to surge over the coming years, it is becoming more crucial for India to look for ways to reduce price shocks and make sure it can source sufficient quantities of crude to meet its requirements.
“On the basis of per capita domestic consumption, India’s crude demand is expected to roughly increase by 50 per cent every decade,” says Abhay Bhargava, the regional head of energy and environment practice at Frost & Sullivan.
“Oil accounted for over 25 per cent of India’s total primary energy supply in 2016, with over 40 per cent powering the transport sector.”
A burgeoning population, rising incomes and the expansion of manufacturing sector are factors that are driving a surging demand for oil. Refineries which buy imported crude and then export their refined products are particularly heavy consumers of oil in India.
India’s consumption of oil hit a record high last year at 196.5 million tonnes, up 11 per cent on the previous year, according to government figures. Increased use of vehicles, including cars and motorbikes, played a major role in the rise, with demand for petrol up 12 per cent and diesel up 5.6 per cent.
India’s expanding appetite for oil is set to continue this year, with energy information provider S&P Global Platts forecasting that consumption of oil will increase by 7 to 8 per cent in 2017, outpacing China’s growth in demand for the third year in a row.
“The government’s clean fuel drive, sharp anticipated growth in transport demand and air travel, and the country’s insatiable growth for petrochemicals will act as a boon for gasoline, jet fuel, LPG and naphtha, helping oil products to post close to double-digit growth in 2017,” according to Platts.
To meet its thirst for oil, India is heavily reliant on imports for the vast majority of its supplies. This means that imports weigh heavily on India’s fiscal and current account deficits. India has benefited over the past couple of years from the slump in oil prices, with lower oil prices freeing up more money for the country and helping to cool inflation. But any rise in prices hits the country hard, with about 80 per cent of its oil demands met by imports.
“India’s reliance on oil imports rises above 90 per cent by 2040, requiring constant vigilance as to the implications for energy security,” according to the International Energy Agency (IEA), which projects that India will be the fastest growing crude consumer in the world. It expects crude imports to rise to 7.2 million barrels per day (bpd) in 2040, second only to China, sourced predominantly from the Middle East.
But prime minister Narendra Modi has set a target of reducing dependence on oil and gas imports by 10 per cent by 2022.
Mr Bhargava explains that “the unpredictability and strain on the national budget, owing to wide fluctuations in crude oil prices that are typical of this industry” are a major challenge for India, along with “a looming threat of supply disruption”.
“Owing to this, India has been challenged to mitigate by investing in storage facilities, which led to an initiative and roll out like the ISPRL [Indian Strategic Petroleum Reserves Ltd],” he says. “This in itself brings in considerable challenges, related to parking of considerable forex into strategic reserves, as well as capital spend on building the infrastructure.”
Along with storage facilities, Mr Bhargava says that other strategies that India is taking to be able to feed its energy needs include encouraging production of domestic crude with various policy initiatives.
“To sustain the growing demand for oil and to de-risk itself from increasingly volatile global markets, India has identified few major priorities for the oil and gas upstream segment which include diversifying supply sources for crude oil, acquisition of equity in oil and gas assets outside India, increasing the share of natural gas in the country’s primary energy basket, and aggressive application of improved oil recovery and enhanced oil recovery techniques.”
The ISPRL is a special purpose vehicle set up by India’s government to establish 5 million tonnes of strategic crude oil storages on the east and west coast of southern India in Visakhapatnam, Mangalore and Padur, to serve as a cushion during any disruption to supplies, at a total cost of more than 40 billion rupees (Dh2.15bn). The storages are built in underground rock caverns. India’s oil minister Dharmendra Pradhan has talked about setting up more such facilities. Last February, during the visit by Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, to India, Mr Pradhan said Abu Dhabi’s Adnoc had agreed to store crude oil in the reserves. There are hopes that with the Crown Prince scheduled to visit India on Thursday for Republic Day, plans for the UAE to provide oil for the strategic reserves might be boosted.
In September, Reuters reported that India had turned to Iran to buy 6 million barrels of crude for its strategic reserves.
India has been increasing its oil imports from Iran after western sanctions were lifted a year ago. In 2016, India’s oil imports from Iran hit their highest levels in at least six years. India bought 473,000 bpd of oil from Iran last year compared to 208,300 bpd in 2015, according to figures from Thomson Reuters Oil Research and Forecasts. In December, imports from Iran reached 546,600 bpd. Iran is now the fourth biggest supplier of oil to India, while it was in seventh place in 2015. Before sanctions were imposed, Iran was India’s second largest supplier of oil.
“India traditionally has been a net importer of oil for taking care of its fuel needs and a rise in international crude oil prices inflates its oil import bill, exerting a negative pressure on its forex reserves,” says Areef Patel, the vice chairman of Patel Integrated Logistics. “However, India has forged supply agreements with African oil-producing countries on a long-term basis and with Iran, India’s fuel supply position is in a comfortable space.”
Beyond that, some experts say that India should look at reducing it consumption of oil by turning to alternative energy sources.
India is already focusing developing on renewable energy sources, including solar and wind.
Sohinder Gill, the director of corporate affairs of the Society of Manufacturers of Electric Vehicles, explains that more needs to be done to reduce the use of oil in the country.
“The government aims at reducing oil imports by 10 per cent by 2022. But it looks like a distant dream as petrol and diesel vehicle sales in India are ever-increasing and hence one of the major factors for soaring oil demands.”
He adds that the Indian government should focus on alternative solutions to lower its dependence on oil.
“Instead of betting on LNG, CNG, hybrid or even BS VI [Bharat Stage emissions standards] compliant vehicles, there should be a greater push towards the adoption of electric vehicles. Two-wheelers form the major chunk of India’s vehicle population and effective steps for conversion of two wheelers to electric is the need of the hour.”
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The Specs
Price, base Dh379,000
Engine 2.9-litre, twin-turbo V6
Gearbox eight-speed automatic
Power 503bhp
Torque 443Nm
On sale now
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
Defined benefit and defined contribution schemes explained
Defined Benefit Plan (DB)
A defined benefit plan is where the benefit is defined by a formula, typically length of service to and salary at date of leaving.
Defined Contribution Plan (DC)
A defined contribution plan is where the benefit depends on the amount of money put into the plan for an employee, and how much investment return is earned on those contributions.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
RESULT
Leeds United 1 Manchester City 1
Leeds: Rodrigo (59')
Man City: Sterling (17')
Man of the Match: Rodrigo Moreno (Leeds)
It’ll be summer in the city as car show tries to move with the times
If 2008 was the year that rocked Detroit, 2019 will be when Motor City gives its annual car extravaganza a revamp that aims to move with the times.
A major change is that this week's North American International Auto Show will be the last to be held in January, after which the event will switch to June.
The new date, organisers said, will allow exhibitors to move vehicles and activities outside the Cobo Center's halls and into other city venues, unencumbered by cold January weather, exemplified this week by snow and ice.
In a market in which trends can easily be outpaced beyond one event, the need to do so was probably exacerbated by the decision of Germany's big three carmakers – BMW, Mercedes-Benz and Audi – to skip the auto show this year.
The show has long allowed car enthusiasts to sit behind the wheel of the latest models at the start of the calendar year but a more fluid car market in an online world has made sales less seasonal.
Similarly, everyday technology seems to be catching up on those whose job it is to get behind microphones and try and tempt the visiting public into making a purchase.
Although sparkly announcers clasp iPads and outline the technical gadgetry hidden beneath bonnets, people's obsession with their own smartphones often appeared to offer a more tempting distraction.
“It's maddening,” said one such worker at Nissan's stand.
The absence of some pizzazz, as well as top marques, was also noted by patrons.
“It looks like there are a few less cars this year,” one annual attendee said of this year's exhibitors.
“I can't help but think it's easier to stay at home than to brave the snow and come here.”
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%204-cylinder%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20101hp%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20135Nm%3Cbr%3E%3Cstrong%3ETransmission%3C%2Fstrong%3E%3A%20Six-speed%20auto%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh79%2C900%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
Results
Stage 7:
1. Caleb Ewan (AUS) Lotto Soudal - 3:18:29
2. Sam Bennett (IRL) Deceuninck-QuickStep - same time
3. Phil Bauhaus (GER) Bahrain Victorious
4. Michael Morkov (DEN) Deceuninck-QuickStep
5. Cees Bol (NED) Team DSM
General Classification:
1. Tadej Pogacar (SLO) UAE Team Emirates - 24:00:28
2. Adam Yates (GBR) Ineos Grenadiers - 0:00:35
3. Joao Almeida (POR) Deceuninck-QuickStep - 0:01:02
4. Chris Harper (AUS) Jumbo-Visma - 0:01:42
5. Neilson Powless (USA) EF Education-Nippo - 0:01:45
We Weren’t Supposed to Survive But We Did
We weren’t supposed to survive but we did.
We weren’t supposed to remember but we did.
We weren’t supposed to write but we did.
We weren’t supposed to fight but we did.
We weren’t supposed to organise but we did.
We weren’t supposed to rap but we did.
We weren’t supposed to find allies but we did.
We weren’t supposed to grow communities but we did.
We weren’t supposed to return but WE ARE.
Amira Sakalla
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
History's medical milestones
1799 - First small pox vaccine administered
1846 - First public demonstration of anaesthesia in surgery
1861 - Louis Pasteur published his germ theory which proved that bacteria caused diseases
1895 - Discovery of x-rays
1923 - Heart valve surgery performed successfully for first time
1928 - Alexander Fleming discovers penicillin
1953 - Structure of DNA discovered
1952 - First organ transplant - a kidney - takes place
1954 - Clinical trials of birth control pill
1979 - MRI, or magnetic resonance imaging, scanned used to diagnose illness and injury.
1998 - The first adult live-donor liver transplant is carried out
Avatar%20(2009)
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