Consumer Issues
Diesel, LPG prices not to go up as government fights political battle

Diesel, domestic LPG and kerosene rates, have not been revised since June last year and under current circumstances it does not look feasible for the UPA government to increase prices

 
New Delhi: Diesel and cooking gas (liquefied petroleum gas or LPG) prices are unlikely to be hiked even after the end of the Monsoon Session of Parliament next week as the government is wary of taking such a decision at a time when it already has political battles on hand, reports PTI.
 
Diesel, domestic LPG and kerosene rates, which have not been revised since June last year, were expected to be raised after the Parliament session ends on 7th September.
 
"It is extremely difficult under present circumstances to raise fuel prices," a top government source said here. "I am not saying that it is impossible but it certainly does not look feasible at this moment of time".
 
Even a hike in prices of petrol, a fuel which was freed from government control in June 2010, would be "difficult," he said.
 
State-run oil marketing companies are losing Rs3.85 per litre on sale of petrol as global oil prices have firmed up since the last revision in July. Petrol price were last hiked by Rs0.70 a litre on 24th July. It currently costs Rs68.46 per litre in Delhi and OMCs were hoping to be able to raise rates once Parliament session ends next week.
 
The government has been in fire-fighting mode since the time Comptroller and Auditor General (CAG) in a report stated that undue benefit of about Rs1.86 lakh crore was extended to private firms by allocating coal blocks for free since 2004.
 
The source said while state-owned oil firms are empowered to revise petrol prices, a decision on diesel, domestic LPG and kerosene rates has to be taken by the Cabinet Committee on Political Affairs (CCPA).
 
Oil companies are losing Rs450 crore per day on selling diesel at prices that are Rs15.55 a litre lower than its cost, kerosene at a discount of Rs29.97 a litre and under selling of Rs231 per 14.2-kg LPG cylinder.
 
Oil Minister S Jaipal Reddy hinted of Government's desire to make up for the losses incurred by OMCs instead of raising prices when he told Lok Sabha in a written reply that he has sought reduction in excise duty on petrol.

"In order to offset the under-recovery (loss) on petrol, Ministry of Petroleum and Natural Gas has taken up the matter with the Ministry of Finance for bringing down the incidence of excise duty," he said.

The government levies Rs14.78 a litre excise duty on petrol and it can be lowered in proportion to the losses oil firms incur currently.

"In order to mitigate losses on sale of petrol, oil marketing companies had, inter alia, suggested to the government to either declare petrol as a 'regulated' product temporarily and provide cash compensation for the under- recovery or reduce the excise duty on petrol from Rs14.78 per litre by an amount equivalent to the under-recovery on petrol," he said.

Not raising prices would mean the government will have to shell out a massive cash subsidy this fiscal to make up losses incurred by state-owned oil firms on sale of diesel, domestic LPG and kerosene. At current rate, the three PSU firms may end the fiscal with a record revenue loss of Rs167 lakh crore.

Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp lost Rs47,811 crore on sale of the three controlled products during the April-June quarter. Of this, about Rs15,000 crore was made good by upstream firms. The remaining was to be compensated by the government by way of cash subsidy but that hasn't come so far.

In the absence of the subsidy support, IOC reported the highest quarterly net loss by any Indian company at Rs22,451 crore. HPCL posted Rs9,249 crore net loss in April-June while BPCL reported a net loss of Rs8,836 crore.

During 2011-12, the three oil marketing companies lost Rs1.38 lakh crore in revenue on selling diesel, LPG and kerosene at government controlled rates. To make up, the Government gave Rs83,500 crore in cash assistance, while upstream firms like Oil and Natural Gas Corp chipped in Rs55,000 crore.

This fiscal, the government may have to give a record Rs1 lakh crore in cash subsidy, sources said.

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COMMENTS

Om Prakash

5 years ago

It has been stated that the situation called for a Rs. 17/- per liter hike for DIESEL but AS A MERCY CONSIDERATION TO AAM AADMAI only Rs. 5/- has been loaded. Can any one publicise the PRICE BREAK UP of the Product to AAM AADMI. What are the components? How does the PROCESSING COST PER LITER COMPARE WITH INTERNATIONAL STANDARDS. HOW DOES EXCISE Etc. LEVIES COMPARE TO INTERNATIONAL AVERAGES?

Make gold hallmarking mandatory to safeguard consumers: CAG

According to the CAG report, consumers are exposed to the risk of buying impure gold jewellery due to inadequate coverage of Indian jewellers and goldsmiths as the hallmarking is not mandatory

New Delhi: To protect consumers from unscrupulous jewellers, the Comptroller and Auditor General (CAG) has advised the government to enforce compulsory hallmarking of gold jewellery, reports PTI.

 

Hallmarking of gold, which is voluntary at present, is a purity certification of the precious metal. The Bureau of Indian Standards (BIS), under the Consumer Affairs Ministry, is the administrative authority of hallmarking.

 

"The Consumer Affairs Ministry and BIS may consider hallmarking of gold jewellery under mandatory certification so as to safeguard the interst of the consumers," CAG said in a report tabled in Parliament on Thursday.

 

Consumers were exposed to the risk of buying impure gold jewellery due to inadequate coverage of Indian jewellers and goldsmiths under the BIS's volunatary hallmarking scheme as the hallmarking was not made mandatory, it noted a report.

 

It also said BIS Act had not been amended to cover hallmarking under mandatory certification.

 

Noting that the reply of the BIS is not acceptable that the jurisdication to amend the Act for making gold hallmarking mandatory rested with the Consumer Affairs Ministry, it said, "Since it (BIS) is the national standard body of the country and is mandated to provide quality assurance to the consumers, whether the concerned standard is made mandatory or not."

 

In early January, the Cabinet had approved the BIS (Amendment) Bill that aims to expand the ambit of mandatory hallmarking to include more products, including gold. The Bill has not yet been introduced in Parliament.

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COMMENTS

M G WARRIER

5 years ago

The way in which public funds and nation’s resources are treated and the revelations about scant attention paid to even simple regulatory reforms that can safeguard citizen’s interests makes one wonder about what actually the legislators are doing. One has to be stupid to believe that responsible authorities were not aware of the benefits implementation of the suggestion for compulsory hall-marking of gold jewellery will bring. Delay, as in many other cases which are scam-infected, is protecting the interests of unscrupulous and greedy elements in the society profiteering from the loop-holes in law. Beyond standardization and hall-marking, gold management needs a makeover from policy angle.
Time is opportune for authorities to think in terms of dedicated professional institutions at regional/state level which will handle gold from a banking angle, equipped with linkages for import and export of gold and gold products as also gold processing and certification, with borrowing and lending capabilities. States like Kerala have successfully intervened in other similar sectors like chits/kuris and lotteries, which were also areas of exploitation by vested interests, whereby players in private sector had to fall in line and function with discipline and self-regulation.M G Warrier

Get your car insured through mobile phone

With the launch of “Policy on the go” by Cholamandalam MS, car insurance has virtually landed on your palm, without you having to forage for it


“Policy on the go”, is a mobile application that you can download on your mobile and get instant quotes generated once you input all the factors asked for. The e-policy will be issued to you online as soon as the cheque gets realised and the documents and on-ground verification is in place.

 

The launch will necessarily reduce the time taken to get policies issued. You can do it on your own without the involvement of any sales agent. Besides, sales agents can also use the technology to help you get policies instantly. It reduces paper work as well as the other hassles and errors associated to it.

 

Almost all the other companies do offer online insurance plans for vehicles. Other websites also offer a comparison of policies that are most suitable to you on basis of what factors you input that govern your choice. But Cholamandalam MS is the first company to have gone a step further for ease of access by introducing the mobile application.

 

Online policies are different from the offline ones in the sense of the process by which the application is generated. Once the application gets confirmed, the process of verification of documents is initiated and a personal verification of the vehicle by the surveyors takes place. Once that is completed, the e-policy gets issued to you and gets delivered into your mail box, followed by the hard copy which could take anything between five to 10 days to get issued. The electronic copy is a valid proof of the policy, in case an event takes place before the hard copy gets issued, since it is digitally signed by the issuer.

 

The other good thing is, since it reduces the time and the resources required to complete the process, it reduces the costs for the company and the benefit might be passed on to the consumer. For that, we will have to wait and watch.

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