London, New Delhi, May 16: The price of oil rocketed to a record high of $127.82 per barrel on Friday, as the US President, Mr George W. Bush, prepared to urge Saudi Arabia to pump more crude, analysts said.  Meanwhile in India, faced with a Rs 2 lakh crore revenue loss on fuel sales this fiscal, the state-run oil firms have decided not to issue new domestic LPG connections and fix quota for the existing customers.

Marketing directors of Indian Oil, Hindustan Pet-roleum and Bharat Petroleum issued a joint petition to the petroleum ministry on Thursday. The petition suggested cost cutting measures as their losses on sale of petrol, diesel, LPG and PDS kerosene mounted to over Rs 550 crore a day, a top official said.  Government’s bar on oil firms to raise fuel prices despite cost of crude oil soaring high, is likely to see the three firms end the current year with a revenue loss of Rs 2 lakh crore. Last year, the revenue loss was Rs 77,304 crore.

Friday’s record run for New York’s light sweet crude beat the previous best of $126.98, which was set on Tuesday.  After hitting $127.98, New York’s main oil futures contract, light sweet crude for June delivery, stood at $127.43, up $3.31 from Thursday’s close.

London’s Brent crude contract for June spiked to $126.34 on Friday, beating the record of $125.90 reached on May 9. It later stood at $126.07, up $3.44. Mr Bush arrived in Saudi Arabia from Israel on Friday for talks with the world’s biggest crude exporter on record oil prices that have hit Western consumers hard.

Mr Bush aides have said that, at more than $125 a barrel, oil prices were set to top the agenda of his talks with the Saudi officials. "The global oil market remains indeed structurally tight," said Mr Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.

London, May 16: Tata Motors may be in for a shock. Under a tough new emissions regime to be introduced by the European Union, Land Rover and Jaguar are likely to face emission fines of up to £17,000 for each car off the assembly lines, according to a report. The European Commission is drawing up plans to fine manufacturers unless they meet tough new targets for carbon dioxide emissions. However, businesses will be judged by the average level of pollution created by the cars they manufacture.

The EC is planning to force manufacturers to reduce carbon dioxide emissions to an average of 130 gm per km by 2012. Under the proposal, carmakers will be fined up to £68 for every gm/km over the limit from 2015. If Jaguar and Land Rover were still owned by Ford they would have escaped these fines as the US motoring giant also produces a number of small cars with low emissions, thus lowering its average within the EU limits.

Land Rover and Jaguar’s most fuel-efficient vehicle, the X-Type two-litre diesel, currently emits 149 gm/km, meaning this model would face a fine of £1,292 per vehicle. The Range Rover V8 emits 376 g/km and would attract a fine of £16,728 per vehicle, according to the Birmingham Post. Ford has warned it would not be possible for existing Jaguar and Land Rover models to meet the EU target.

The EC proposes to exclude firms producing fewer than 10,000 vehicles per year to help smaller manufacturers like Warwickshire-based Aston Martin. However, Jaguar-Land Rover produces 2,86,000 vehicles a year at its sites in Britain, Birmingham MP, Mr Richard Burden, said. The Labour MP was objecting to the fact that sale of Jaguar and Land Rover marques to Tata Motors would mean they "will face big penalties as a result of those regulations because they are becoming independent of Ford".

Mumbai, May 16: It was a good week for the stock markets with the Nifty up 3.51 per cent and the Sensex 4.17 per cent. Even the broader markets fared well. This feel good factor percolated to the sectoral indices with the IT and metals index up 3.8 per cent and 8.3 per cent respectively for the week.

The laggard was the oil and gas index which skid one per cent because of galloping crude oil prices. The oil refining stocks were marginally up despite being down on Friday. The oil companies have disputed the government’s underrecovery figures. The government has placed it at Rs 70,577 crore while the oil companies say it is Rs 77,000 crore.

The market on Friday even ignored the inflation figures for the second consecutive week. According to market analysts the view was that the RBI was unlikely to announce any measures as there is still one tranche of 25 basis points to come into force on May 24. The RBI had announced a total hike of 75 basis points in the cash reserve ratio, the money which banks have to keep frozen with the RBI. This will impound a total of nearly Rs 28,000 crore.

"Significant liquidity will be sucked out of the market by the RBI measures," said Mr Bhavesh Shah, head equity research, Asit C Mehta Investment intermediate Ltd. "In June the corporates with have to pay taxes, so some more liquidity will be mopped up." The Sensex closed up 81 points at 17,434 on Friday, shedding over 100 points it that it had gained during the day, in a choppy session.

Chennai, May 16: Even as Karur, the center for handloom-driven home textiles industry is flanked with issues of yarn price fluctuation and labour shortage, the industry in this town is tipped to show huge growth over the next five years.

Mr Manikam Ramaswami, chairman, CII - Tamil Nadu, told this newspaper that the home textiles industry in this small town of Tamil Nadu can grow from the current $0.8 billion to $3 billion within the next five years. Karur, which employs more than three lakh people in the home textiles industry, is famous for its pillow covers, bedspreads, kitchen linen and table mats.

Apart from catering to major domestic home textile markets like Delhi, Panipat and Mumbai, handlooms from Karur are also exported to leading chain stores like WalMart, Target, IKEA and Ahlens.The industry, recently has been facing problems such as rise in the price of hank yarn, increasing exports of cotton, rupee appreciation, labour shortage, inflation, and rising cost of inputs.  However, Karur still has the distinct advantage of reduced costs because of large-scale production. The high quality of the textiles manufactured here also makes it the preferred supplier for most markets.

Unlike the textile industry, which is becoming more and more power intensive, the home textile industry is still handloom driven. This gives it an advantage in an industry, which has to deal with deficient power supply for at least the next five years. Mr Ramaswami pointed out that the treatment of wastes proves to be the most important concern for this industry. If the government addresses the demand for a pipeline to dispose treated water to the ocean, it would greatly benefit the industry, he said. On the increasing prices of yarn, he stressed upon the need for mechanization of farming.

Only 5 lakh bales are grown in Tamil Nadu as against the 70 lakh bales consumed. He said that mechanization of farming would solve the labour shortage and also improve the profitability of cultivation of cotton.

Seattle, May 16: Two weeks after Microsoft Corp abandoned its pursuit of Yahoo Inc, a proxy fight launched by activist investor Mr Carl Icahn has put Microsoft in the driver’s seat. Mr Icahn wants Yahoo to reopen talks with Microsoft, saying the company’s board had acted "irrationally" when it rejected Microsoft’s $47.5 billion buyout offer.

"With Yahoo being pushed by shareholders to get back to the table, you would think it’s just what Microsoft wanted," said Mr Marc Weingarten, an attorney with Schulte Roth & Zabel. For its part, Microsoft has declined to comment on Mr Icahn’s actions. A company spokesman repeated the same message that its executives have said over the last two weeks: it had moved on. Still, Mr Icahn has opened the door for Microsoft to swoop in as white knight and buy Yahoo in a friendly deal without instigating the proxy battle it had threatened. "Microsoft can come directly back to the Yahoo board and save them from the proxy contest, save them from all the criticism that they are getting," said Mr Weingarten.

Microsoft’s motivation for buying Yahoo — to create an online advertising powerhouse to rival Google Inc — remains intact. The alternatives of a build-from-within strategy and a piece-by-piece acquisition strategy could bring significant risk. "The whole strategy for Microsoft, in an M&A sense, was to say ‘fine, we take our bat and ball and go home.’ You don’t want to say that and then be seen popping out of the house and looking down the block for your former playmates," said Mr Marshall Sonenshine, chairman of New York-based investment bank Sonenshine Partners.

"If they have any intention of coming back, they shouldn’t say anything. If they don’t have any intention, then they have nothing to say," said Mr Sonenshine, who sees the deal getting done at a price slightly above $33 a share. Mr Sonenshine said an eventual Microsoft-Yahoo deal may play out like News Corp’s acquisition of Dow Jones.

The Bancroft family, which controlled Dow Jones, balked at News Corp’s $5.6 billion bid, but the 65 per cent premium proved too attractive for many family members to resist, especially after it eliminated the possibility of competing bids.

New York, May 16: Cracks in the airline industry are widening, pushing smaller regional air carriers such as Mesa Air Group Inc to the brink of bankruptcy. Regional jet operators such as Mesa and ExpressJet Holdings Inc are being pressured by flight cutbacks from national airlines that reduce the number of passengers into outlying areas where regional carriers fly.

"Without the flights from the major carriers, the regional carriers don’t have a sufficient customer base to support their operations," said Lorraine McGowen, a bankruptcy attorney at the Orrick law firm in New York. National airlines are re-evaluating the hub-and-spoke model they have used for decades as transfer points to get passengers to their destinations as they try to find ways to manage fuel, labour and other costs. Last month, Mesa, which provides regional service for Delta Air Lines Inc, US Airways Group Inc and UAL Corp’s United Airlines, said that Delta planned early termination of its Delta Connection agreement with Mesa’s Freedom Airlines subsidiary. Mesa said it would contest Delta’s plan, which threatens to lop off about 20 per cent of Mesa’s passenger revenue.

Mesa is also running out of options to fund potentially crippling debt obligations, said Mr Roger King, an airlines analyst at credit research firm CreditSights. The company has two convertible notes coming due, one for $38 million in June and another for $100 million in February, and bondholders have an option to make the company repurchase those notes, Mr King said.

"The first one might not be the stake in the heart, but the second one would be," said Mr King, adding that his analysis shows the company may have about $130 million in cash. Mesa, which has delayed filing its first quarter financial results with the SEC, has not publicly addressed the issue of bankruptcy protection, and its general counsel, Mr Brian Gillman, declined to comment on whether bankruptcy was a possibility.

The company said on Wednesday that its shareholders had approved a plan to issue as many shares as necessary to buy back all of its senior convertible bonds, due in 2023. But based on its current stock price of 63 cents per share, whether it can reach that goal is questionable, analysts said.

"Their options are very limited," King said. "They might just want to declare bankruptcy now." Mesa shares are down from $7.25 a year ago and Standard & Poor’s removed the company from its SmallCap 600 index in April, citing the company’s market value as $33 million.