While petrol prices are market-linked, the government fixes the rates of LPG, kerosene and diesel, which results in a large budgetary expenditure on subsidies
Mumbai: Making a case for raising prices of diesel, kerosene and LPG, the Reserve Bank of India on Tuesday said hike in rates of petroleum products is necessary to arrest fiscal slippages, reports PTI.
"Overall from the perspective of vulnerabilities emerging from the fiscal and current account deficits, it is imperative for macroeconomic stability that administered prices of petroleum products are increased to reflect their true costs of production," RBI governor D Subbarao said in the annual monetary policy statement for 2012-13.
While petrol prices are market-linked, the government fixes the rates of LPG, kerosene and diesel, which results in a large budgetary expenditure on subsidies.
Global crude oil prices have surged since the beginning of 2012 on account of geo-political concerns in the Middle East and abundant global liquidity. The price of Brent crude rose to $120 a barrel in mid-April from $111 in January.
RBI said the Budget estimate of oil subsidy is likely to fall "significantly short of the required amount".
High subsidies are putting pressure on the country's fiscal deficit, which touched 5.9% of GDP last fiscal and is pegged at 5.1% in 2012-13. India imports about 80% of its crude oil requirement.
The government targets to bring down the subsidy bill to below 2% of GDP this fiscal and 1.75% in the subsequent years. Government has made a provision of Rs 40,000 crore towards fuel subsidy for 2012-13.
"...Several upside risks to the budgeted fiscal deficit remain. Containment of non-plan expenditure within budget estimates for 2012-13 is contingent upon the government's ability to adhere to its commitment of capping subsidies," Subbarao said.
Mr Subbarao said any slippage in fiscal deficit would have implications for inflation. "Upside risks to inflation persist. These considerations inherently limit the space for further reduction in policy rates," he said.
Persistent demand pressure emerging from inadequate steps to contain subsidies, as indicated in the recent Union Budget, will further reduce the space for rate cut, he added.
Fuelled by gold demand, crude oil prices and decelerating growth in emerging economies, India's current account deficit (CAD), widened to 4% of GDP in April-December 2011, up from 3.3% a year ago.
CAD is the difference between inflow and outflow of foreign exchange into the country.
In its Macroeconomic and Monetary Developments in 2011-12 report, the RBI had yesterday said, "The policy design to achieve macro-objectives hinges on deregulation and the upward adjustment of oil prices by letting the demand effects work towards diminishing fiscal and external risks".
Jay Bharat Maruti’s total revenues increased 7%, however, its net profit declined during the fourth quarter
Jay Bharat Maruti’s net profit declined 7.08% to Rs11.08 crore for the quarter ended 31 March 2012 compared to Rs12.02 crore same quarter a year ago despite higher revenues.
During the same period, the company’s total income stood at Rs326.76 crore compared to Rs303.51 crore, a rise of 7.66%.
During the March 2012 quarter, the company has reported an EPS of Rs5.12 compared to Rs4.83 in the corresponding period last fiscal.
The company’s net profit increased 48.8% to Rs19.63 crore for the year ended 31 March 2012 from Rs38.3 crore for the year ended 31 March 2011. For FY11-12, the total income was at Rs1,068.31 crore against Rs1,060.56 crore for FY10-11, representing an increase of 0.73%. During the same period, Jay Bharat Maruti has reported an EPS of Rs9.07 compared to Rs17.69.
At 2:35pm, Jay Bharat Maruti shares were trading 11.7% up at Rs63.80 per share on the Bombay Stock Exchange, while the benchmark Sensex was 1.10% up at 17,340.38.
Indag Rubber reported total revenues of Rs56.32 crore against Rs40.79 crore, a growth of 38.09% during the fourth quarter
Indag Rubber has reported net profit of Rs6.50 crore for the quarter ended 31 March 2012 compared to Rs3.65 crore for the corresponding quarter last fiscal, representing an increase of 78.27%.
In the same period, the company’s total income was Rs56.32 crore against Rs40.79 crore, a growth of 38.09%. During the March 2012 quarter, the company reported an EPS of Rs12.39 compared to Rs6.95 in the corresponding quarter last fiscal.
The company has reported net profit of Rs20.87 crore for the year ended 31 March 2012 compared to Rs10.75 crore for FY10-11, representing an increase of 94.11%.
In the same period, the company’s total income increased 44.16% to Rs216.13 crore from Rs149.93 crore. The company has reported an EPS of Rs39.75 for FY11-12 compared to Rs20.48 for FY10-11.
At 2:33pm, Indag Rubber shares were trading 2.04% up at Rs220.55 per share on the Bombay Stock Exchange, while the benchmark Sensex was 1.2% up at 17,357.14.