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Monday, September 2, 2013

Desh Shanti is not Dianthe..... closing petrol pumps after 8 pm to save oil !!!

In yet another upward movement, petrol prices have gone up by Rs.2.35 a litre and diesel got its monthly dose of 50 paise hike per litre ~ as the petroleum ministry is batting for a substantial rise in diesel, domestic LPG and kerosene prices. According to media reports, diesel prices may see a one-time hike of R. 3-5 per litre, kerosene of Rs 2 and LPG of Rs 50 per cylinder.

Even globally political equations keep change – some change, while some changes are necessitated … 
Gaffe – (n) 1. A clumsy social error; a faux pas: 2. A blatant mistake or misjudgment.

Marpadi Veerappa Moily, elected from Chickballapur  is the current Minister of Petroleum and Natural Gas. Moily was the former Chief Minister of Karnataka.  He is in news as he was widely quoted in the media that the Government is considering various proposals including shutting petrol pumps in the night to taper fuel demand as it looks at ways to cut the massive oil import bill. 

It is stated that the ministry plans to launch a massive fuel conservation drive from September 16 to cut fuel demand by 3 per cent and save an estimated Rs 16,000 crore or USD 2.5 billion in forex outgo. Reacting sharply, BJP spokesperson Shahnawaz Hussain said, “What is petrol pump? Government will close the country… Won’t the people fill their car fuel tanks in the morning? This is a strange move by Moily”. Petrol for sure is not going to give any great saving by closure at 8 pm ~ at best it could result in some hoarding, increased price in those restricted hours – eventually making the travel more costly for the common man. 

The Indian financial markets have been in a turmoil as fears of a widening CAD have prompted foreign investors to exit Indian assets for safer bets. The dollar rupee divide is reaching new nadirs daily.  India imports over 70 percent of its oil requirement. In the absence of a rise in exports, the trade and current account deficits have widened, piling up pressure on the rupee which is already weak.

Another suggestion which has come in for sharp criticism is of importing more oil from Iran.  For long, Iran was the preferred supplier – but the US and EU sanctions have more than halved Iran’s oil exports. Now India is leaning more on its arch-rival Iraq which reportedly is supplying oil for rupees.  In order to circumvent the US sanctions, payment to Iran is in euros and dollars. 

Strangely, is more purchase from Iran to be thought of now, when an Indian ship MV Desh Shanti is illegally detained by Iran falsely Indian ambassador in Tehran was summoned and reminded on the  fate of M V Dianthe, a ship not seized but affected by the sanctions on Islamic Republic of Iran Shipping Lines. It is learnt that arising out of sanctions, financial transaction related to the purchase of the ship from its original owner could not be completed. And so, Nordbank AG — the bank involved in the transaction over the vessel — was on the lookout to initiate legal action.  The firm chose to act when the vessel was berthed in India. Invoking admiralty rules and maritime laws that apply on international waters, Nordbank filed a petition in the Bombay High Court in August 2011, seeking a stay on the movement of the vessel just days before it was to sail out. From here, began a legal process that has now got the Indian government in a tangle. 

It is reported that in Dec 2012, Court passed an order that the ship could be allowed to sail on providing a security of about $ 18 million, the value of the vessel as estimated by the petitioner. This was Rs 99 crore at the then prevalent exchange rate of Rs 54.30 to the dollar. Now after blatantly violating International rules and holding the Indian ship to ransom, Tehran has raised the issue of Diyanat,  being detained at India's Mundra port.  Though they are not officially linked, the timing makes things amply clear.   

Amidst a storm over proposal to shut petrol pumps during night to taper fuel demand, oil minister M Veerappa Moily is now quoted as saying that Government had not made any such proposal and the idea had come from public.

With regards – S. Sampathkumar
2nd Sept 2013.

Photo credit : Indian Express; News inputs taken from Indian Express and other newssites.

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