Zuzer Lucknowala is worried about the price of oil. His wedding and events company is feeling the heat from rising fuel costs in India, which has significantly pushed up the amount he has to spend to transport supplies to events he caters for, cutting right through his profit margin.
"Fuel price increases have forced us back to the drawing board," says Mr Lucknowala, who is the chairman and managing director of Party Cruisers in Mumbai. "There's a jeopardy in accepting and absorbing the cost upsurge."
Mr Lucknowala is not alone in sounding caution: soaring fuel prices are a growing worry for many businesses in India, and pose a risk to growth in Asia’s third-biggest economy. Prices have hit multiple records in India in recent days, with petrol soaring above 85 rupees (Dh4.61) a litre in Mumbai on Friday.
Fuel rates have been driven by the steady rise in global crude prices. A weaker rupee and steep taxes on petrol and diesel in India have further compounded the issue. India is heavily dependent on oil imports. It’s the world’s third largest importer of the commodity and relies on imports for about 80 per cent of its oil needs.
“If oil prices [continue to] rise it’s negative for the Indian economy,” says Jigar Trivedi, an analyst at Anand Rathi Commodities. “Inflation will spike and the rupee will be very weak.”
_______________
Read more:
Indian regulators crack down on battered banking sector
Investors dump Indian bonds on concerns over banking regulations, weakening rupee
India's $1.8bn jewellery scandal is down to risk management failure, former banker says
_______________
Dharmendra Pradhan, India’s minister of petroleum and natural gas, has said that the government is looking at solutions to address the situation. While the policymakers ponder on how to bring the fuel prices down, the opposition Congress party has grabbed the opportunity to criticise the government, saying the issue is detrimental to everyone be it a common man, a small firm or a big conglomerate. With general elections coming up next year in the country, this only adds to the pressure on New Delhi.
Oil prices have spiked after US President Donald Trump withdrew from an accord with Iran and announced re-imposition of sanctions. Opec supply cuts and declining production in Venezuela are among the other factors that have fuelled the increase in crude prices in global markets.
“The increase in international crude oil prices is terrible news for India,” says KR Pradeep, a chartered accountant who advises multinational companies from his base in Bangalore. “It worsens the trade deficit, current account deficit and balance of payments. It shrinks the fiscal manoeuvrability and has the potential of upsetting the ensuing parliamentary elections in India.”
Mr Pradhan earlier this month, spoke to Saudi Arabia’s Minister of Energy, Industry and Mineral Resources, Khalid Al Falih, over the phone, and “expressed his concern about rising prices and its negative impact on consumers and the Indian economy”, according to a statement by India’s ministry of petroleum and natural gas.
However, with Saudi Arabia aiming to keep oil at elevated levels, according to Bloomberg reports, it looks as though Indians, the likes of Raja Naidu, probably will not get a relief in the short term.
Mr Naidu, an Uber driver in Mumbai, is finding it difficult to make both ends meet and record high petrol prices are not helping.
“I was already struggling to pay off my car loan and petrol costs are adding to my problems now,” he says.
Analysts say the government is under pressure to keep the economy on a steady path if fuel prices remained on the up trajectory.
“The government’s efforts to ensure a well-oiled economy could be tested in its fifth year in office as multiple risks materialise, led by exogenous factors such as a runaway rise in global crude oil prices,” analysts at Crisil, a Standard & Poor’s unit in India, wrote in a report. “A rise in oil prices could stir the inflation scourge back to life.”
Crisil says it expects India’s gross domestic product to grow at 7.5 per cent in the current financial year. But the consensus, suggests that India would ideally need to achieve economic growth of 8 per cent and above to create more jobs for its population of 1.3 billion.
The Indian government may well end up having to intervene and reduce the duties on fuel, if oil prices remain high, Moody’s Investors Services says in a research note.
Taxes account for more than 20 per cent of fuel retail prices after they were raised in 2016 when oil prices dropped. State-owned companies could also be ordered by the government to absorb some of the costs, according to Moody’s.
“Because of the government’s widening fiscal deficit, Oil and Natural Gas Corporation and Oil India could be asked to bear part of the Indian government’s fuel subsidy, if prices stay above $60 per barrel for the fiscal year ending March 2019,” says Vikas Halan, a senior vice president at Moody’s.
The two companies have not contributed to fuel subsidies over the past three years, but in previous years they have absorbed more than 40 per cent of the country’s annual subsidy bill, according to the ratings agency.
It predicts that fuel subsidies in India could reach up to 530 billion rupees in the current financial year, the highest in four years, based on crude oil prices averaging between $60 and $80 per barrel.
“The government has budgeted for 250bn rupees of fuel subsidies in fiscal 2019, leaving a shortfall of [up to] 280bn rupees,” says Moody’s.
But if the government cuts taxes, this means less money in its coffers to spend on areas such as infrastructure, the development of which is vital to the country’s economy.
“Obviously it’s big challenge,” says Anita Gandhi, a director at Arihant Capital Markets, a financial services firm based in Mumbai.
“The last few years we had seen that lower oil prices had helped the Indian economy ... in terms of improving its fiscal deficit and current account deficit. Now we’re seeing a reversal of that.”
India last Monday received its first shipment of crude oil from the UAE, as part of its efforts to fill a strategic petroleum reserve in Mangalore in south India, which is aimed at helping to boost India’s energy security. The state-controlled Abu Dhabi National Oil Company will eventually store 5.86 million barrels of crude oil at India’s strategic petroleum reserve.
“The filling up began with the 2 million barrels reaching Mangalore,” according to India’s petroleum ministry statement. “Adnoc will bring additional crude oil and fill up the Mangalore cavern later this year.”
The ministry added that this is “the first time that a private foreign entity, is filling up an Indian strategic petroleum reserve cavern with crude oil”, which may also shield India from price volatility in oil markets.
Mr Pradhan this month visited the UAE, looking for further investments for India’s oil and gas sector.
However, at home, businessmen like Mr Lucknowala to cab drivers such as Mr Naidu, are counting the cost of the rise in fuel prices – their biggest fear is that they could rise even higher.
Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Cargoz%3Cbr%3E%3Cstrong%3EDate%20started%3A%3C%2Fstrong%3E%20January%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Premlal%20Pullisserry%20and%20Lijo%20Antony%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2030%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Seed%3C%2Fp%3E%0A
Ultra processed foods
- Carbonated drinks, sweet or savoury packaged snacks, confectionery, mass-produced packaged breads and buns
- margarines and spreads; cookies, biscuits, pastries, cakes, and cake mixes, breakfast cereals, cereal and energy bars;
- energy drinks, milk drinks, fruit yoghurts and fruit drinks, cocoa drinks, meat and chicken extracts and instant sauces
- infant formulas and follow-on milks, health and slimming products such as powdered or fortified meal and dish substitutes,
- many ready-to-heat products including pre-prepared pies and pasta and pizza dishes, poultry and fish nuggets and sticks, sausages, burgers, hot dogs, and other reconstituted meat products, powdered and packaged instant soups, noodles and desserts.
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%3A%3C%2Fstrong%3E%20Eco%20Way%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20December%202023%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Ivan%20Kroshnyi%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Electric%20vehicles%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Bootstrapped%20with%20undisclosed%20funding.%20Looking%20to%20raise%20funds%20from%20outside%3Cbr%3E%3C%2Fp%3E%0A
Company%20profile
%3Cp%3EName%3A%20Tabby%3Cbr%3EFounded%3A%20August%202019%3B%20platform%20went%20live%20in%20February%202020%3Cbr%3EFounder%2FCEO%3A%20Hosam%20Arab%2C%20co-founder%3A%20Daniil%20Barkalov%3Cbr%3EBased%3A%20Dubai%2C%20UAE%3Cbr%3ESector%3A%20Payments%3Cbr%3ESize%3A%2040-50%20employees%3Cbr%3EStage%3A%20Series%20A%3Cbr%3EInvestors%3A%20Arbor%20Ventures%2C%20Mubadala%20Capital%2C%20Wamda%20Capital%2C%20STV%2C%20Raed%20Ventures%2C%20Global%20Founders%20Capital%2C%20JIMCO%2C%20Global%20Ventures%2C%20Venture%20Souq%2C%20Outliers%20VC%2C%20MSA%20Capital%2C%20HOF%20and%20AB%20Accelerator.%3Cbr%3E%3C%2Fp%3E%0A
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
What is a Ponzi scheme?
A fraudulent investment operation where the scammer provides fake reports and generates returns for old investors through money paid by new investors, rather than through ligitimate business activities.
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
SHALASH%20THE%20IRAQI
%3Cp%3EAuthor%3A%20Shalash%3Cbr%3ETranslator%3A%20Luke%20Leafgren%3Cbr%3EPages%3A%20352%3Cbr%3EPublisher%3A%20And%20Other%20Stories%3C%2Fp%3E%0A
The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Killing of Qassem Suleimani
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.9-litre%20twin-turbo%20V6%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E8-speed%20auto%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E536hp%20(including%20138hp%20e-motor)%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E750Nm%20(including%20400Nm%20e-motor)%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh1%2C380%2C000%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
Getting there
Flydubai flies direct from Dubai to Tbilisi from Dh1,025 return including taxes
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
Buy farm-fresh food
The UAE is stepping up its game when it comes to platforms for local farms to show off and sell their produce.
In Dubai, visit Emirati Farmers Souq at The Pointe every Saturday from 8am to 2pm, which has produce from Al Ammar Farm, Omar Al Katri Farm, Hikarivege Vegetables, Rashed Farms and Al Khaleej Honey Trading, among others.
In Sharjah, the Aljada residential community will launch a new outdoor farmers’ market every Friday starting this weekend. Manbat will be held from 3pm to 8pm, and will host 30 farmers, local home-grown entrepreneurs and food stalls from the teams behind Badia Farms; Emirates Hydroponics Farms; Modern Organic Farm; Revolution Real; Astraea Farms; and Al Khaleej Food.
In Abu Dhabi, order farm produce from Food Crowd, an online grocery platform that supplies fresh and organic ingredients directly from farms such as Emirates Bio Farm, TFC, Armela Farms and mother company Al Dahra.
Best Foreign Language Film nominees
Capernaum (Lebanon)
Cold War (Poland)
Never Look Away (Germany)
Roma (Mexico)
Shoplifters (Japan)
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
The biog
Favourite book: You Are the Placebo – Making your mind matter, by Dr Joe Dispenza
Hobby: Running and watching Welsh rugby
Travel destination: Cyprus in the summer
Life goals: To be an aspirational and passionate University educator, enjoy life, be healthy and be the best dad possible.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
FIGHT CARD
Fights start from 6pm Friday, January 31
Catchweight 82kg
Piotr Kuberski (POL) v Ahmed Saeb (IRQ)
Women’s bantamweight
Cornelia Holm (SWE) v Corinne Laframboise (CAN)
Welterweight
Omar Hussein (JOR) v Vitalii Stoian (UKR)
Welterweight
Josh Togo (LEB) v Ali Dyusenov (UZB)
Flyweight
Isaac Pimentel (BRA) v Delfin Nawen (PHI)
Catchweight 80kg
Seb Eubank (GBR) v Mohamed El Mokadem (EGY)
Lightweight
Mohammad Yahya (UAE) v Ramadan Noaman (EGY)
Lightweight
Alan Omer (GER) v Reydon Romero (PHI)
Welterweight
Ahmed Labban (LEB) v Juho Valamaa (FIN)
Featherweight
Elias Boudegzdame (ALG) v Austin Arnett (USA)
Super heavyweight
Roman Wehbe (LEB) v Maciej Sosnowski (POL)
APPLE IPAD MINI (A17 PRO)
Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits
Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine
Storage: 128/256/512GB
Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4
Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps
Biometrics: Touch ID, Face ID
Colours: Blue, purple, space grey, starlight
In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
'My Son'
Director: Christian Carion
Starring: James McAvoy, Claire Foy, Tom Cullen, Gary Lewis
Rating: 2/5
Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Fasset%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2019%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Mohammad%20Raafi%20Hossain%2C%20Daniel%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%3C%2Fstrong%3E%20%242.45%20million%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2086%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-series%20B%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Investcorp%2C%20Liberty%20City%20Ventures%2C%20Fatima%20Gobi%20Ventures%2C%20Primal%20Capital%2C%20Wealthwell%20Ventures%2C%20FHS%20Capital%2C%20VN2%20Capital%2C%20local%20family%20offices%3C%2Fp%3E%0A