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from India Insight:

Bold moves, smart timing on rail fares, diesel proposal

(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

The railway budget in India is usually presented in parliament a few days before the main budget in February. In a rare move, the railways minister on Wednesday announced an across-the-board increase in passenger fares starting Jan. 21, the first such step in nine years.

The increase is significant. A ticket for an air-conditioned coach with three-tier sleeping berths in a mail or express train from New Delhi to Mumbai will cost 1,205 rupees, up 13 percent from 1,065 rupees.

Former railways minister Mamata Banerjee and some political parties panned the government’s move, but reactions have been muted among the media and the public. There was little criticism even on Twitter, with the fare increase not making it to the day’s trending topics.

from India Insight:

India and the art of the 24-hour economic reform

It's not every day that India makes such a dramatic move as raising diesel prices, or allowing foreign direct investment in its debt-walloped passenger airlines. It's certainly not every day that it caps this 24-hour period by allowing foreign investment in retail businesses.

In short, big international companies like Wal-Mart will be able to start their own shops in India, or will be able to buy up to 51 percent of existing retail businesses. This could affect small grocery stores like Nilgiris in southern India all the way down to local street vendors.

from India Insight:

Bold move on diesel, but hold the rollback

Sometimes the government does what it promises. India raised diesel prices by 5 rupees per litre on Thursday in a move guaranteed to alienate the common man, but please foreign investors, oil marketing companies and ratings agencies.

Opposition parties and key government ally Mamata Banerjee expressed their expected disappointment with the decision. The BJP called it a "cruel joke" and "mortal blow," while West Bengal Chief Minister Banerjee planned a street rally on Saturday and said she was "shocked".

from India Insight:

Diesel strategy: merely old wine in new bottle?

Planning to buy a car? Seeing petrol prices head northwards, chances are high you would have changed your mind and now intend to buy a diesel-powered vehicle. That might be a smart move given the government's reluctance to tinker with diesel prices in the face of stiff opposition. But there are plans afoot to deter you.

After considering raising diesel prices at one point, the government is now mulling a proposal of higher duty on diesel vehicles and even thinking of increasing diesel prices only for cars and sports utility vehicles (SUVs) -- something that has been debated earlier.

from India Insight:

It’s time India bites the diesel bullet

"81 rupees?" asked an astonished TV anchor when an irate Bengaluru-based consumer called in after the recent 7.5-rupee hike in petrol prices. Perhaps cars that run on milk are now needed, the anchor suggested -- when the caller said the dairy product costs around 30 rupees a litre.

While milk-powered automobiles might be a distant dream, the reality remains that those relying on petrol vehicles will now need to do their budgeting again. If a falling rupee and high inflation were not enough, this steepest-ever rise in petrol prices will surely pinch.

from Global Investing:

The missing barrels of oil

Where are the missing barrels of oil, asks Barclays Capital.

Oil inventories in the United States rose sharply last week, with demand for oil products  such as gasoline at the lowest in 15 years and crude stockpiles at the highest since last September. Americans, pinched in the wallet, are clearly cutting back on fuel use.

But worldwide, the inventories picture is different -- Barclays calculates in  fact that oil stocks are around 50 million barrels below the seasonal average. And sustainable spare capacity in the market is less than 2 million barrels per day. What that means is that the world has "extremely limited buffers to absorb any one of the series of potential geopolitical mishaps." (Barclays writes)

from Summit Notebook:

Toyota will not freeze out Iceland, bets on Russia bounce

The world's biggest carmaker, Toyota, will not follow the road of McDonald's and abandon Iceland even though it is selling 'very few' cars there at the moment and its distributor has been seized by the banks as its owner went belly-up, Toyota Motor Europe President and CEO Tadashi Arashima told the Reuters Auto Summit in Paris on Tuesday.
"We have a big market share there, of 25 percent, and it is good for our after-sales," Arashima said.
The banks are trying to sell the distributor but Toyota does not plan to take ownership like it does in its key European markets of Germany, France, Italy, Spain and the United Kingdom, and some Scandinavian countries.
 

Arashima said he believes the Russian market will recover sooner than many think, after the west European markets but well before the rest of East Europe -- in 2011 or 2012.

from Environment Forum:

Carbon ahoy! Who should pay to clean up ships, and what they carry?

The U.S.  is out to create a clean-air zone around its coastlines, targeting diesel ships that look pretty dirty from shore. The cost will be only a penny per pair of sneakers, the EPA advises. Of course the cost of shoes can sneak up on you -- the total is $3.2 billion per year by 2020. Health savings will more than compensate for costs, they say.

The idea of who should pay for carbon in the course of trade is getting a bit hazier, it seems. China only a couple of weeks ago said importers should pay for the carbon costs of goods they buy which are produced in China. The thinking largely has been you-make-it-you-pay-for-the-carbon, but maybe it will become you-bought-it-you-bought-the-carbon. It's all up for grabs as nations talk about what to do once the Kyoto protocol runs out in 2012. At least the U.S. and China are making nice noises at each other as discussions in Germany get under way.

from Environment Forum:

VW on electric cars: “Please, lower your expectations”

Volkswagen's U.S. chief ruffled some entrepreneurial feathers on Thursday when he told a group of business school students at UCLA's Anderson School of Management that  it will be 35 years before electric cars make up a significant portion of the world's auto market.

During his prepared remarks, Volkswagen Group of America CEO Stefan Jacoby outlined the German automaker's view that fossil fuels and traditional combustion engines will be with us for many years to come. VW, however, is committed to making them vastly more fuel efficient. The company is also investing heavily in so-called clean diesel technology, which reduces tailpipe emissions of climate-changing greenhouse gases while still giving cars their "fun-to-drive" pep.

from Environment Forum:

What bailout? Automakers lay out green future at L.A. show

 The car is king in Southern California, so what better place for stressed out auto executives to blow off some steam and take a break from their considerable recent troubles?

That's exactly what they did this week at the Los Angeles auto show, where many car manufacturers laid out plans for electric, fuel cell and diesel cars that they say are key to reviving the ailing industry.

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