Companies & Sectors
Hike prices to save oil companies, says CRISIL

According to the ratings agency it is absolutely crucial that prices of regulated fuels be raised by at least 10-15% immediately and gradually be linked to international prices

Mumbai: Alarmed by the record losses reported by oil marketing majors, ratings agency CRISIL on Tuesday said there is an urgent need to increase prices of regulated diesel, kerosene and cooking gas, which will also help government finances, reports PTI.

 

"Given the crippling under-recoveries of oil marketing companies (OMCs) and a fast deteriorating fiscal situation, a hike in prices of regulated fuels, especially diesel, which accounts for 60% of under-recoveries is essential and inevitable," the agency's research wing said in a note.

 

"It is absolutely crucial that prices of regulated fuels be raised by at least 10-15% immediately and gradually be linked to international prices," it added.

 

It said the three state-run oil marketing majors IOC, BPCL and HPCL have reported a combined loss of Rs40,500 crore, primarily driven by under-recoveries and the absence of government compensation. IOC early this month had reported the nation's highest ever quarterly loss over Rs22,000 crore during the first quarter of FY13.

 

Diesel prices were revised last in June 2011, and with the coming effect of crude prices moving north and a currency depreciation, the under recoveries of OMCs have touched a record high of Rs47,800 crore during the June quarter, it said.

 

In 2011-12, the under-recoveries had jumped by 77% to Rs1.38 lakh crore and will be higher this fiscal as well, CRISIL said.

 

Because of the apparent lack of political will to increase the prices, OMCs are currently facing a loss of Rs14 per litre on diesel, Rs29 on kerosene and Rs250 on every cooking gas cylinder, it said.

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Finance Ministry wants PSU banks to phase out unsecured short-term loans

Short term loans create pressure on the PSBs and there is a need to reduce this pressure by strengthening the process of sanction of such loans, the Ministry says

New Delhi: The Indian government has asked the public sector banks (PSBs) to phase out all short-term loans without collaterals by January end saying these lending create pressure on balance sheets of banks, reports PTI.

 

"All such loans shall either be phased out in the next six months time or collateral security will be created," a Finance Ministry communication to heads of all PSBs said.

 

The PSBs have also been asked to frame a policy for sanctioning short term unsecured loans.

 

It further said in future, any sanctions without security should have the approval of their Boards as "most of these loans are unsecured and therefore create pressure on PSBs for keeping such account standard".

 

The Finance Ministry, said in case any such loans have become non-performing assets (NPAs), details of the cases should be provided to it.

 

The directive applies to loans which are being extended without any security and are of short term in nature.

 

Since short term loans create pressure on the PSBs, the ministry felt there is a need to reduce this pressure by strengthening the process of sanction of such loans, the communication issued last month said.

 

The instructions to PSBs comes at a time when NPAs in the state-owned banks are rising due to slowdown in economic activities.

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New standard packaging norms for FMCG companies from November

All manufacturers of 19 commodities like baby food, weaning food, biscuits, bread, butter, coffee, tea, cereals, pulses, milk powder, salt, edible oils, rice and wheat flour, aerated soft drink, drinking water, cement and paints will have to mandatorily pack and sell items in standard sizes only

New Delhi: Amid growing cases of unfair trade practices, the Indian government on Tuesday said it has made it mandatory for fast moving consumer goods (FMCG) companies to pack and sell specific products like biscuits and milk powder in standard sizes only with effect from 1st November, reports PTI.

 

Following complaints regarding unfair reduction in the quantity of packaged products from some consumer organisation, the government has amended the Legal Metrology (Packaged Commodities) Rules 2011.

 

"It has been observed that some manufacturers in the country are reducing quantity of packaged products by small fractions without making a change in the price of the product.

 

The government after due examination of the issue amended the Legal Metrology Rules, 2011," Food and Consumer Affairs Minister KV Thomas said in a written reply to the Lok Sabha.

 

As per the amendment, all manufacturers of 19 commodities mentioned in second schedule of the said Rule will have to mandatorily pack items in standard sizes only, he said, adding that any unfair reduction of quantity will not be permitted.

 

This order will be implemented from November 1, 2012, he said.

 

Baby food, weaning food, biscuits, bread, butter, coffee, tea, cereals, pulses, milk powder, salt, edible oils, rice and wheat flour, aerated soft drink, drinking water, cement and paints are among other products that manufacturers are required to pack and sell in standard sizes, he added.

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