Government owned Oil Marketing Companies (OMCs) raised the price of petrol by Rs 6.28 per litre on May 23, 2012. After the inclusion of local taxes, this price hike amounts to an increase of Rs 7.54 per litre in Delhi. India met 76 per cent of its total petroleum requirement in 2011-12 through imports. Petrol prices have officially been decontrolled since June 2010. However, it has been argued by experts that prices of petroleum products have not been increased sufficiently in order to pass on cost increases to consumers. The inability to pass on international crude prices to consumers has affected OMCs more in recent months due to the depreciating rupee, which has further increased their losses. The total under recoveries faced by OMCs for diesel, PDS kerosene and domestic LPG for 2011-12 stands at Rs 138,541 crore. It was recently announced that the OMCs will receive Rs 38,500 crore from the Ministry of Finance to partially compensate for the high under recoveries. The prices of diesel, LPG and kerosene, which are responsible for the large under recoveries, are unchanged. Experts suggest that the price hike would have a limited impact on inflation, since petrol has a weightage of around 1 per cent on the Wholesale Price Index, whereas diesel has a weightage of around 4.7 per cent. The petrol price hike is unlikely to have an impact on the fiscal deficit, since petrol prices are technically deregulated. Reports suggest that a panel of ministers is due to meet on Friday to discuss diesel, kerosene and LPG prices. In a 2010 report, the Expert Group on "A Viable and Sustainable System of Pricing of Petroleum Products" (Kelkar Committee) observed that given India’s dependence on imports and rising oil prices, domestic prices of petroleum products must match international prices. It stated that price controls on diesel and petroleum in particular had resulted in major imbalances in consumption patterns across the country. This had also led to the exit of private sector oil marketing companies from the market, and affected domestic competition. Its recommendations included the following:
Reports suggest that a partial rollback of petrol prices might be considered soon.
The Piracy Bill was introduced in Lok Sabha on April 24, 2012. According to the Statement of Objects and Reasons, there has been a significant increase in attacks by pirates, particularly in the Gulf of Aden and off the coast of Somalia. This has affected security of maritime traffic and personnel plying between Asia, Europe and Africa. Moreover, enhanced naval presence in the Gulf of Aden is now causing pirates to shift operations close to India’s Exclusive Economic Zone. As a result, a number of Somali pirates are presently in the custody of Indian police authorities. However, since piracy as a crime is not included in the Indian Penal Code (IPC), this has led to problems in prosecution. The Piracy Bill intends to fill this gap and provide clarity in the law. The Bill, if passed by Parliament, would extend to the entire Exclusive Economic Zone of India (EEZ). Under international law, EEZ is a seazone over which a country has special rights for exploration and use of marine resources. It stretches outward from the coast, up to 200 nautical miles into the sea. The Bill defines 'piracy' as any illegal act of violence or detention for private ends by the crew or passengers of a private ship or aircraft on high seas or at a place outside the jurisdiction of any State. This definition is akin to the definition of piracy laid down under the 'United Nations Convention on the Law of the Sea'. The Bill seeks to punish piracy with imprisonment for life. In cases where piracy leads to death, it may be punished with death. It also provides that if arms, ammunition are recovered from the possession of the accused, or if there is evidence of threat of violence, the burden of proof for proving innocence would shift to the accused. The Bill empowers the government to set up designated courts for speedy trial of offences and authorizes the court to prosecute the accused regardless of his/ her nationality. It also provides for extradition. You can access the Bill text here.
