New Delhi: Consumers may have to burn a larger hole in their pockets to keep their vehicles running as retail prices of petrol and diesel are set to hit all-time high levels all over again soon. Rising oil prices and the reluctance on the part of the government to cut taxes are two factors responsible for the certain spike in auto fuel prices.
Retail price of petrol in Delhi is Rs 76.61 a litre now. Going by the price rise of up to 20 paisa per day over the last week, petrol would breach record high level of Rs 78.43, touched on May 29, in about 10 days.
Diesel is within the sniffing distance of all-time high of Rs 69.31 a litre, again recorded on May 29. Diesel is retailing at Rs 68.61 a litre in Delhi.
Uncertainty in global oil markets has increased post US sanctions on Iran and call for its strict compliance by president Donald Trump. The price of benchmark Brent crude was hovering over $75 a barrel, while the Indian basket was just a tad lower at $73 a barrel last month.
“But prices are rising now with expectation that it could even breach $100 a barrel post-November 24 when energy sanctions on Iran kick in. This could take petrol and diesel prices to new highs with the auto fuel even breaching Rs 100 a litre mark,” said an oil sector analyst, who did not wish to be named as he was still completing his calculations.
The government’s reluctance to cut excise duty on petrol and diesel has become a bigger worry for auto fuel consumers. This has made retail prices higher even with lower levels of crude oil prices.
Petrol breached its previous all-time high level recorded on September 14, 2013 (when it stood at Rs 76.06 a litre in Delhi) in May this year when crude oil prices were around $80 a barrel. Interestingly, crude oil was at $109.47 a barrel level in September 2013.
With crude reaching closer to $100 a barrel mark soon, retail price of petrol, which has already reached Rs 84.33 a litre in Mumbai, would easily cross Rs 100 a litre mark, making history.
“This is insane as the government is letting consumers suffer even though it has pocketed higher revenue from the sector with the understanding that this will come to their rescue when oil prices rise. If this is not the right time for excise duty cut on petrol and diesel, then one fails to understand what would be one,” said a former oil secretary asking not to be named.
The government’s fiscal concerns have prevented any duty cuts on petrol and diesel. With rising inflation and slowing factory output, revenue from the oil sector is key for the centre and states. This is also probably the reason why petroleum products have yet not been included in GST.
Prices of petrol and diesel rose to all-time high levels in the last week of May this year after oil companies resumed daily price hikes of the two products post Karnataka assembly elections. During elections, oil marketing companies kept petrol and diesel prices untouched for a record 19 days.
The daily increase in petrol and diesel prices again is higher now as OMCs are regularly holding the price line for few days under government instructions to prevent a public backlash.
Even though crude oil prices are rising again, they are still well off the highs of September 2013, when retail prices were at all-time highs. At that time, the price of the Indian basket of crude oil had shot up to $110 per barrel, almost 44 per cent more than what it is today.
“The need of the hour is to immediately cut excise duty on petrol and diesel not by mere Rs 2 per litre as was done on October 3, but to provide full relief to consumers by effecting a Rs 4 per litre cut in duties. This would rob the government of over Rs 50,000 crore in revenue but would save the country from higher inflation and demand squeeze,” said another oil sector expert who wished not to be named.
As per government estimates, India’s import bill could rise by up to $50 billion, impacting the current account deficit severely, if the present surge in oil is maintained. This would take oil import bill to about $140 billion in FY19, up from $88 billion in FY18.
The expectation for continuation of higher oil price this year has gained ground due a series of global developments, including continuing production cut by Opec and Russia, and forthcoming public offer proposed by world’s largest oil producer Saudi Aramco.
RBI asks banks to grout ATMs to wall, floor for security by September-end
Mumbai: The Reserve Bank asked banks to ensure their ATMs are grouted to a wall, pillar, or floor by September-end, except those installed in high secured premises such as airports, to enhance security of the cash vending machines.
In 2016, the RBI had st up a Committee on Currency Movement (CCM) to review the entire gamut of security of treasure in transit.
Based on the recommendations of the panel, the central bank has now issued instructions aimed at mitigating risks in ATM operations and enhancing security.
As part of the security measures, all “ATMs shall be operated for cash replenishment only with digital One Time Combination (OTC) locks”.
Also, “All ATMs shall be grouted to a structure (wall, pillar, floor, etc.) by September 30, 2019, except for ATMs installed in highly secured premises such as airports, etc. which have adequate CCTV coverage and are guarded by state/central security personnel”.
Further, banks may also consider rolling out a comprehensive e-surveillance mechanism at the ATMs to ensure timely alerts and quick response, it said.
The new measures to be adopted by banks are in addition to the existing instructions, practices and guidance issued by the RBI and law enforcement agencies.
The RBI also warned the banks that non-adherence of timelines or non-observance of the instructions would attract regulatory action including levy of penalty.
SBI refuses to disclose communication from RBI, govt on electoral bonds
New Delhi: The State Bank of India has refused to disclose any communication it received from the government or the Reserve Bank of India on electoral bonds, terming it “personal information” and held in “fiduciary capacity”.
Responding to an RTI filed by Pune-based activist Vihar Durve who had demanded copies of all letters, correspondence, directions, notifications or e-mails received from the RBI or any government department between 2017 and 2019, the SBI said it cannot be provided by it.
The bank cited two exemption clauses under the RTI Act to deny information — Section 8(1)(e) which pertains to information held in fiduciary capacity and Section 8(1)(J) which pertains to personal information of a person which has no link to any public activity.
“Information sought by the applicant cannot be disclosed as it is in fiduciary capacity, disclosure of which is exempted under Section 8(1)(e) and 8(1)(j) of the RTI Act, 2005,” the Central Public Information Officer of the bank said in his reply.
The bank also refused to give any details of action taken by it on such communications from the RBI and the government.
The electoral bonds, for giving donations to political parties, are being sold through SBI only. The sale opens in SBI branches when the Finance Ministry issues a notification of their sale for a given period.
The scheme of electoral bonds notified by the Centre in 2018 has been challenged in the Supreme Court.
Only the political parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last general election to the House of the People or the Legislative Assembly of the State, shall be eligible to receive the bonds.
The bonds may be purchased by a person who is a citizen of India “or incorporated or established in India,” the government had said in a statement last year.
The bonds remain valid for 15 days and can be encashed by an eligible political party only through an account with the authorised bank within that period only.
A voluntary group working in the field of electoral reforms, Association for Democratic Reforms (ADR), has demanded a stay on the sale while the CPI(M) has challenged it before the Supreme Court in separate petitions.
ADR recently filed an application in the Supreme Court seeking a stay on the Electoral Bond Scheme, 2018 which was notified by the Centre in January last year.
Walmart’s Flipkart, Indian startup GOQii settle dispute over sharp discounting
New Delhi: Walmart unit Flipkart has settled a legal dispute with an Indian startup that alleged it suffered losses because its products were sharply discounted on the global retailer’s website.
GOQii, a seller of smartwatch-type health devices, sued Flipkart last month in a Mumbai court, alleging its devices were discounted by around 70 per cent to the retail price, much more than the two sides had agreed. The court had, as an interim measure, ordered device sales to be halted on Flipkart.
In a joint statement , the companies said the dispute had been resolved and GOQii health devices would again be available on Flipkart. They didn’t say how the settlement was reached.
Vishal Gondal, CEO of GOQii, told Reuters the company would withdraw the case against Flipkart. The e-commerce retailer’s “team worked on a resolution benefitting the brand and the customers”, Gondal said in the statement.
The legal spat was seen as a test case of the giant retailer’s operating strategy in the country.
Small traders and a right-wing group close to Prime Minister Narendra Modi’s ruling party have raised concerns about large e-commerce companies, saying they burn billions of dollars deeply discounting some products to lure customers onto their sites, in the expectation that they will also buy other goods.
GOQii said it signed an agreement last year with a Flipkart unit to sell two of its devices at a price not below 1,999 rupees (USD 28.63) and 1,499 rupees. It later found the devices were being sold for 999 rupees and 699 rupees, calling it “unauthorized” discounting.
In response, Flipkart said it reserved “the right to institute actions for defamation, both civil and criminal”, arguing it wasn’t responsible for any discounts which are determined by third-party firms which sell via its website.
The two companies struck a friendlier tone in their joint-statement on Friday as they brought the legal battle to an end.
“We have ensured constant engagement with GOQii to resolve any differences,” Flipkart said in the statement.
With a 19 per cent market share, GOQii was the second-biggest player in India’s so-called wearables market last year, data from industry tracker IDC showed. The market is dominated by China’s Xiaomi, with Samsung a small player.