Companies & Sectors
Oil Ministry pushing for hike in diesel, LPG prices

There is absolute consensus that prices of diesel, LPG and even kerosene have to be raised, but when and how is uncertain says a top official

New Delhi: Close on the heels of 70 paise per litre hike in petrol prices, the Oil Ministry is pushing for an increase in diesel and domestic cooking gas LPG prices, even though it is unsure of political support for the unpopular move with the ruling United Progressive Alliance (UPA) government, reports PTI.
"The most important reform is not allowing FDI in retail, but cutting subsidies on diesel, LPG and kerosene," a top Oil Ministry official said in the capital.
"There is absolute consensus that prices of diesel, LPG and even kerosene have to be raised. But when and how is uncertain," the official said.
He said Vice President's election is on 7th August and "they say you cannot raise rates before that. Soon after that is the Monsoon session of Parliament and though nothing stops us from raising prices when Parliament is in session but we do not have numbers."
Diesel, LPG and kerosene prices have not been raised since 25th June last year even though cost of raw material (crude oil) has spiralled and rupee depreciated against US dollar making imports even more costly.
State-owned oil firms currently sell the fuel at a loss of Rs11.26 a litre while they lose Rs319 on sale of every 14.2-kg LPG cylinder for domestic consumption. Besides, they are losing Rs28.56 per litre on kerosene.
Without a price hike, a staggering Rs1.6 lakh crore of losses on these fuel sales would have to be met by the government this fiscal.
A ministerial panel which is authorised to decide on pricing of the three fuels has not been reconstituted after its previous head Pranab Mukherjee resigned as Finance Minister to get elected as the President of India.
In absence of the Empowered Group of Ministers (EGoM), the ministry is contemplating sending a price hike proposal.


NCP threatens to pull out from UPA government

The Sharad Pawar led party also indicated that any pull out in Delhi could have a cascading effect on the coalition in Maharashtra 

New Delhi: Upping the ante, sulking Nationalist Congress Party (NCP) on Tuesday warned the Congress that if its demands like coordination committee for United Progressive Alliance (UPA) coalition and better treatment of allies were not resolved by tomorrow it would pull out from the government, reports PTI.
The party led by Sharad Pawar has also indicated that any pull out in Delhi could have a cascading effect on the coalition in Maharashtra as the state leaders favour exiting the Congress-led ministry. The NCP has been in coalition with the Congress in Maharashtra government for the last 13 years.
An NCP leader, who declined to be identified, said that non-Congress constituents in the UPA have been sympathetic to the demands raised by it and the party was also in touch with the supporting parties of the UPA coalition.
He also said that Congress has held no backchannel talks so far with it on the issues raised by Pawar in his letter to Prime Minister Manmohan Singh and UPA Chairperson Sonia Gandhi.
"We are a responsible party and it would not behove the stature of a leader like Pawar to be absent at two successive Cabinet meetings," he said, suggesting that Pawar would rather like to end the suspense on his resignation.
"Therefore our deadline ends tomorrow", he said ahead of Thursday's meeting of the Cabinet.
Pawar and his party colleague Praful Patel had kept away from the Cabinet meeting last week expressing their desire to quit for building their party.
Patel has strongly refuted speculation that the NCP was putting on Congress with an eye for No 2 slot for Pawar in the Cabinet.
"The issues raised by the NCP were for better coordination and all the other UPA constituents were "sympathetic", the leader claimed.


Competition Commission announces leniency for those giving information on cartels

The Competition Commission said leniency will be shown to those companies and individuals coming out with information on cartels and anti-competitive agreements while protecting their identification 

New Delhi: Encouraged by the general response on its Rs6,300-crore penalty in the cement cartel case, the Competition Commission of India (CCI) on Tuesday said leniency will be shown to those companies and individuals coming out with information on cartels and anti-competitive agreements, reports PTI.
"It is right time that we reach out to people and encourage them to come out with information on more cartels," said Ashok Chawla, Chairman, CCI.
Pointing out the Competition Act provides for 'leniency programme' for those who help CCI tackle the 'pernicious practise of cartelisation', Chawla said: 'nobody has used it so far'.
Just last month, the CCI slapped a hefty Rs6,307-crore penalty on 11 cement companies, including ACC, Ambuja Cements, Ultratech and Jaiprakash Associates for price cartelisation. The fine was fixed at 50% of their profit during 2009-10 and 2010-11.
While the order drew flak from cement companies, which plan to appeal before the Competition Appellate Tribunal (COMPAT), the CCI has largely been welcomed for the bold step.
In an advertisement in major newspapers today, the CCI announced a leniency programme 'for enterprises/individuals who disclose their role in a cartel and co-operate with subsequent investigations'.
CCI also assured the identification as well as information obtained would be kept confidential.
"In the advanced jurisdictions, cartels are prosecuted based on evidence obtained through leniency provisions... evidence of meetings, phone calls, and other mechanisms."
"...Exchanging information is more substantial than relying on economic and circumstantial evidence..A whistle blower can provide documented evidence," said Ram Tamara, Director, Nathan Economic Consulting India.
He added that in the case of the European paraffin wax cartel, five wax producers had applied for leniency and provided details on cartel meetings and other communications.
As a result, he said, the European Commission got evidence enough to establish that a cartel operated for over 10 years.
Senior advocate and competition law expert OP Dua said "The CCI needs to device guidelines for the the leniency programme on the lines of  OECD's guidelines on fighting cartels and leniency programmes".
The CCI, which became fully functional in May 2009, is empowered by an Act of Parliament to take up cases relating to violation of section 3 and and 4 of the Competition Act, pertaining to anti-competitive agreement and abuse of dominant market position, respectively.



Nem Chandra Singhal

4 years ago

It may turned out another babu office who may put restrictions in free trade in India.
Nem Chandra Singhal

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