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NEW DELHI 20th Jan 2013--Reliance Industries Ltd. 500325.BY -0.51% and Essar Oil Ltd. 500134.BY -1.09% are keen on selling diesel to Indian institutional and industrial buyers, two people familiar with the matter said Monday, after state-run oil retailers said Thursday they will no longer subsidize bulk sales of the fuel. India's three state-run fuel retailers have raised diesel prices for bulk buyers by more than 9 rupees a liter from last Friday, eliminating all subsidies. These companies--Indian Oil Corp., 530965.BY -1.19% Hindustan Petroleum Corp. 500104.BY -2.20% and Bharat Petroleum 500547.BY -1.32% Corp.--will however continue to sell diesel to retail consumers at a subsidized rate through their gas stations. Earlier, private companies couldn't compete with state-run fuel retailers in diesel sales as they couldn't make money by selling the fuel at the prices state-run companies did. For state-run companies, the government offsets part of their losses through direct cash subsidies. Private companies, however, don't get any cash payment from the government to sell fuel products at state-set prices. Private-sector companies did, however, compete with state-run retailers on the sale of aviation turbine fuel, which is set according to market rates. "Essar Oil has already started to get a few queries from customers on diesel sales. It's a big opportunity," said a person familiar with the matter. He said the bulk diesel market in India could be around 12 million metric tons a year, and private companies would like to get a toehold in this fast-growing business. The biggest bulk buyers of diesel in India are the railways and defense forces. Apart from that, transportation companies and various industries too need diesel to run their operations. Another person familiar with the matter said Reliance Industries is interested in the business. "Reliance is waiting for more clarity and to see the fine print of the decision by state-run oil companies. If the business is truly opened up, the company will be interested," he said. A senior executive at a state-run fuel retailer said his company has no objection to private companies competing with state-run companies in bulk diesel sales. But, the government should also allow state-run companies the same flexibility as private companies, cutting down on the time-consuming procedures that state-run companies have to follow for bulk sales, he added. http://online.wsj.com/article/SB10001424127887324624404578255011260360422.html

Essar oil is selling very little Diesel on their own court yard but the refinery is selling to PSU at market price.I have paste quote by Naresh Nayyar Essar Energy CEO. Have your fuel retail margins in India turned positive yet? (This is before the deregulation announced) I do not want to comment on whether our margins are plus or minus, or big or small. Our model is almost a franchise one and, therefore, we don’t have any capital commitment. So, we are retaining this as a strategy, even if we are incurring losses. As and when the sector opens up, we would have a platform to quickly ramp up. The only commitment we have is to provide some sort of return to the dealers who have invested in us. In the overall scheme of things, it is not a large amount for us. On an average, we are paying our dealers a commission or service charge of about $1 million a month, or about Rs 60-70 crore a year. We do make some money and we are trying to enter the non-fuel revenue segment. In India, we have about 1,400 retail outlets. We have no plans for any aggressive expansion on the retail front. In an attempt to increase its non-fuel revenues, leading private sector refiner Essar Oil today said it has tied up with coffee chain major Cafe Coffee Day (CCD). "Non-fuel business is a strategic business for Essar Oil and we expect it to contribute significantly to the company's growth in the coming few years. Our tie-up with Cafe Coffee Day is part of this strategy and it also results in effective use of available land in a retail outlet's premises, thus leveraging on the available resources to a maximum level," Essar Oil Marketing CEO S Thangapandian said in a statement. To answer your last question, it will be easier if it is explained in graph form, take year 2010 as your beginning of your x-axis, for 2 years till now, essar sells Diesel Rs10 more than PSU retails, as of new year, the subsidies is gradually decrease till nil which will be end of 2014, the private players are more efficient then their PSU counterpart, so we will not need to wait till nil although it is good to make noise in order to pressure the ministry.

Hi Mike29, the deregulation of the diesel subsidy to the PSU companies is a positive news for Essar and Reliance retail pumps which have been disadvantage for years as their competitors were selling diesel at a much cheaper rate. The Government has to reduce the subsidy as it is bleeding the nations finance and recently the credit agencies has warn of possible downgrade if the subsidies continue draining. In order not to hike the diesel price one shot and hurting the public's pocket which will result in massive strike, they will increase gradually each month which will be completed approximately 2 years. It will give the private companies even playing field on the retail front but the Government is allowing bulk sales now although further clarification is needed. With the recent expansion and optimization of the Vadinar Refinery and this deregulation, it will compound the turnover in the coming years. If you are not on board now, it will be too late as this ship is about to lift off.

Majority of the debt is on capital expenditure apart from the $1Billion sales tax issue which is why it has fallen from 300p, but the good news is all the bad news is behind us, and most of the plant invested are now generating revenue thus will begin reducing debt significantly. To invest now for the assets which Essar energy hold will cost almost double. In Dec 2010 the SP was 580p high, this is a no brainer.

NEW DELHI--Reliance Industries Ltd. (500325.BY) and Essar Oil Ltd. (500134.BY) are keen on selling diesel to Indian institutional and industrial buyers, two persons familiar with the matter said Monday, after state-run oil retailers said Thursday they will no longer subsidize bulk sales of the fuel. India's three state run fuel retailers have raised prices for bulk buyers by more than 9 rupees a liter from last Friday, eliminating all subsidies. These companies--Indian Oil Corp., Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp. Ltd.--will however continue to sell diesel to retail consumers at a subsidized rate through their gas stations. Earlier, private companies couldn't compete with state-run companies in diesel sales as they couldn't make money selling at the prices state-run companies did. They did, however, compete with these companies on the sale of aviation turbine fuel, which is set according to market rates. "Essar Oil has already started to get a few queries from customers on diesel sales. It's a big opportunity," said a person familiar with the matter. He said the bulk diesel market in India could be around 12 million tons a year, and private companies would like to get a toehold in this fast-growing business. The biggest bulk buyers of diesel in India are the railways and defense forces. Apart from that, transportation companies and various industries too need diesel to run their operations. Another person familiar with the matter said Reliance Industries is interested in the business. "Reliance is waiting for more clarity and to see the fine print of the decision by state-run oil companies. If the business is truly opened up, the company will be interested," he said. A senior executive with a large state-run fuel retailer said it has no objection to private companies competing with state-run companies in bulk diesel sales, but said the government should also allow state-run companies the same flexibility as private companies, cutting down on the time-consuming procedures that state-run companies have to follow for bulk sales. http://www.4-traders.com/WTI-SPOT-2355639/news/Essar-Reliance-Keen-on-Selling-Diesel-to-Indian-Bulk-Buyers-Sources-15889161/

This share price should be sitting minimum 160p IMHO

131p is still a massive bargain compare to high of 580p in Dec 2010. With all the good news coming out now for the last few months.

This will finally reverse the fortune of Essar oil pump retail outlet, largest private player in India

Essar oil broke through with Rs77, with news NEW DELHI: The government on Thursday raised the annual cap on supply of cheap cooking gas to nine cylinders from six and GAVE FREEDOM to state-run oil companies to raise price of diesel "from time to time". The decision on diesel would imply a partial float of the fuel's price under which the subsidy would be frozen at a particular level and retailers would revise pump prices in tandem with the trend in international fuel trading hubs and crude oil. But this sense of relief on cooking gas cylinder could soon be over once the retailers start raising pump price of diesel which has the potential of pushing up cost of daily living and prices of daal-chawal. On the surface, the decision to allow retailers freedom to revise price of diesel is not new. The government had taken an in-principle decision to allow market pricing of the main transportation fuel when it freed up petrol pricing in June 2010. So seemingly Thursday's decision marked implementation of that decision. But Moily's statement after the CCPA meeting that the government would continue to subsidise the fuel clearly indicates a partial float. In the current scenario, the government is expected to freeze the subsidy at roughly Rs 5 a litre and the remaining loss of Rs 5 can be covered over the next few months by raising the pump price in small doses, say in tranches of Rs 1-2. And if international prices of the fuel and crude comes down in the meantime, it will do away with any need to raise price further. This is broadly in line with the recommendations of a finance ministry panel tasked with suggesting ways for fiscal consolidation. Moily said the decision to raise the cap on cheap cooking gas would cost the government Rs 9,300 crore more in subsidy. He said the subsisdy burden on diesel was expected to be Rs 94,000 crore. Together with kerosene, the total fuel subsidy is expected to be at Rs 160,000 crore this fiscal.

Petrol price hiked by 35 paise per litre, good for essar oil retail The rate of petrol has been incresaed by around 35 paise per litre. PTI | Jan 15, 2013, 11.14PM IST NEW DELHI: Petrol price has been hiked by about 35 paise per litre on Tuesday in line with firming raw material cost. Petrol will cost Rs 67.56 per litre in Delhi with effect from midnight, industry sources said. Prices vary from city to city due to differential local sales tax or VAT rates.

It is just bad journalism, the headlines is deceiving. It seems the journalist have not been following this company at all. With high Capex, inevitably to have high depreciation but will reduce tax and debt.

124p is still way below the correct price.

LONDON (SHARECAST) - India’s second largest private refiner, Essar Oil, a subsidiary of UK-listed Essar Energy has posted highlights for the third quarter of the fiscal year 2012. Essar Oil reported that the current price gross refining margin was $9.75 per barrel for the October-December quarter, representing a 350% rise compared to $2.82 per barrel from the corresponding period in 2012. The company reported that this reflected the higher complexity benefits post-completion of expansion and optimization projects. Gross revenues for the third quarter stood at Rs 25,909 crore, up 86% over Rs 13,897 crore reported in the corresponding period in 2012. One crore equates to ten million. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) was up 8.4 times at Rs 1,242 crore compared to Rs 148 crore in the third quarter of 2012. Profit after tax for the quarter was at Rs 32 crore versus a loss of Rs 362 crore in the same period last year. Suresh Jain, Chief financial Officer of Essar Oil, commented: “With current price gross refining margin continuing to remain firm, the company has witnessed [a] major jump in its overall earnings performance in the third quarter. “Our EBITDA and PAT would have been higher by Rs 260 crores in this quarter if not for the foreign exchange gain accounted in the previous quarter.” http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=20623398

ICAP said currency-trading volumes on its EBS electronic platform fell 4 percent last month to the lowest level since at least 2006. The average daily foreign-exchange volume dropped to $91.8 billion from $95.7 billion in December 2011, ICAP said today in a statement on its website. The level climbed as high as $274.2 billion in September 2008, according to data on its website starting in January 2006. Average daily volumes in fixed-income products on the company’s BrokerTec trading platform rose 5 percent from a year ago, the company said. The decline in currency volumes comes as the combination of interest rates at or near record lows in the U.S., Europe and Japan reduce price swings among the dollar, euro and yen, the three most-traded currencies. “There’s been a significant fall in foreign-exchange volumes across all platforms over the past couple of quarters,” said Michael Derks, chief strategist at FxPro Group Ltd. in London. “The reduced currency volatility means traders aren’t seeing the opportunities. There’s no real incentive to be taking big positions in major asset classes and that may continue for a while longer.”

Essar shares to shine in 2013, only reason share price still in current position due to stigma attached. All the bad news are behind us and only positive news from the last few months. Arden Partners has price target of £1.38 in December from £1.28 few months ago, the lowest among the brokers. Deutsche Bank is £1.70, JP Cazenova £1.50, Morgan Stanley £1.70

Essar oil breaks 52 weeks high on BSE( SENSEX) and NSE (NIFTY)

The above chart of Essar illustrates the weakness over the past two years, but after trading sideways for the past nine months, recent positive newsflow is putting upward pressure on the moving averages. Bullish divergence between recent chart support at 114.7p and the rising oscillators suggests an upward move could be imminent and successful assault of the 50-day moving average could trigger further gains towards the April high of 165p. At the time of writing the share price is 118.6p and I believe a long-trade with a stop-loss below recent support at 112.6p offers an attractive risk/reward bias, with medium-term targets seen at 125.7p, 138.5p and 164p. This report was written by Mark Allen – Head of Derivatives at Simple Investments Stockbrokers. The writer does not hold a position in Essar Energy, but client accounts may. The material in this report has come from Simply Charts and Essar Energy’s corporate website.

The oil and gas producers have been among the worst performing sectors this quarter, falling an average of almost 7% in the past three months, as the global growth outlook diminishes, despite oil prices remaining relatively stable. Essar Energy (LON:ESSR), an oil and gas explorer, refiner and energy generator, heavily focused toward India, has been one of the poorest, losing 80% of its value in the past two years. Interim results on 26th November, however, appeal to my contrarian disposition, after reporting a near tripling in operational earnings for the first half of 2012. Higher refining margins and the contribution from a UK refinery it acquired last year offset poor performance at its Indian power business. The groups Stanlow field, the second largest UK refinery, which Essar acquired from Royal Dutch Shell last year for $350 million, delivered a substantial increase in ebitda due to strong operating performance. The unit earned ebitda of $197.2 million in the first half of 2012 compared with $22.2 million in the first eight months of ownership to March 31st. The company has an objective of adding over $3 a barrel to refining margins at Stanlow within the next two years and confirmed it is already approaching an increment of $1 a barrel towards that. Essar, which is majority owned (76.72%) by Indian conglomerate Essar Group, has also made encouraging progress at resolving many long-standing problems that have weighed on the share price. In January, the group was hit by an unfavourable ruling by the Indian Supreme Court that left the company liable for $1.2 billion in taxes, representing half of its market capitalisation. Essar has since agreed a final settlement with the courts and will pay final charges in eight quarterly instalments from January 2013. Essar has also experienced long delays securing clearance for its coal mines, but last month the Indian government granted the necessary permits, with initial coal production now expected in 15-18 months’ time. Many challenges still remain, with results from its Indian power business falling below analysts’ expectations and the company’s debt rising to over $8.4 billion. Essar’s management, however, recently declared they are focused on ways to lower its debt burden and have reiterated that reducing debt is a major focus area. The energy group currently trades on 20x forecast earnings, but with expansion finally emerging analysts are forecasting over 200% growth next year, putting them on a lowly earnings multiple of 8.9x for 2014 and an attractive PEG of 0.1. http://www.proactiveinvestors.co.uk/columns/trader-talk/11399/contrarian-turnaround-at-essar-energy-11399.html The above chart of Essar illustrates the weakness over the past two years, but after trading sideways for the past nine months, recent positive newsflow is putting upward pressure on the moving averages. Bullish divergence between recent chart support at 114.7p and the rising oscillators s

Essar Oil Ltd plans to ramp up production of its coal-bed methane block at Raniganj in West Bengal to 3 mscmd by the end of financial year, 2013-14, chairman Shashi Ruia (pictured) said on Thursday at the company’s annual general meeting. “At Raniganj, our flagship CBM block, we are currently producing 43,000 standard cubic metre a day (scmd) of gas , which is scheduled to rise to 3 million scmd by the end of next fiscal, making us the largest CBM player in the country,” Ruia said. He said the company’s other blocks, which were at various exploratory stages, are also on track to achieve their milestones. “Going forward we expect E&P (exploration and production) to be a significant value creator for our business,” the chairman said. In the last 12 months, the company has completed expansion and optimisation of its projects taking its refining capacity from 10.5 million tonne per annum (mtpa) to 20 mtpa. The company’s development and production assets also include Ratna and R-Series oil fields in offshore Mumbai, and the Mehsana oil block in Gujarat. Shares of Essar Oil on Thursday ended down 0.5% at Rs71.50 on the National Stock Exchange BUT FROM LOW OF RS43 JUST FEW MONTHS BACK.

Sold a third of my shares starting from £1.24, beginning to understand some of Essar Energy's shareholders psychology, with the stigma attached to this share, whenever there is a negative external news such as the Fiscal Cliff republican's revolt against House Speaker Boehner plan B on Thursday, Essar shareholders panic and will sell although the fundamentals is pointing towards the positive direction. True to my hunch it did exactly that started buying from 1.19 and below : )