FILE PHOTO: U.S. President Donald Trump's Mar-a-Lago estate in Palm Beach, Florida, U.S., March 22, 2019. REUTERS/Kevin Lamarque/File Photo
April 8, 2019
WEST PALM BEACH, Fla. (Reuters) – A Chinese woman charged with bluffing her way into President Donald Trump’s Mar-a-Lago Florida resort last month, renewing concerns about security at the club, is due in court on Monday for a hearing to determine whether she will remain in custody.
The woman, Yujing Zhang, was arrested after giving conflicting reasons for being in the club during one of Trump’s routine weekend visits. According to prosecutors, she was carrying four cellphones, a laptop computer, an external hard drive and a thumb drive containing what investigators described as “malicious malware.”
The FBI is examining whether Zhang has any links to Chinese intelligence or political influence operations, two U.S. government sources told Reuters last week.
She told one of the U.S. Secret Service agents who protect the property she was there to use the pool and later told a second agent that she had been invited to a U.N. Chinese American Association event, though club officials determined no such event was scheduled. She was arrested after agents determined she had no legitimate reason to be at the club, a for-profit business owned by Trump.
Zhang has been charged with making false statements to a federal officer and entering or remaining in a restricted area, charges that carry up to a five-year sentence in federal prison if she is convicted. She is 32 or 33 years old, according to documents filed in U.S. District Court in West Palm Beach, Florida.
Congressional Democrats raised questions on Wednesday about security at the club, where Trump is in close and frequent contact with club members and guests. The president brushed off the concerns, calling the incident a “fluke” and praising the Secret Service.
(Reporting by Zachary Fagenson; Writing by Scott Malone; Editing by Lisa Shumaker)
Small business owners are getting hounded by tax collectors from thousands of miles away after the Supreme Court approved online sales taxes for out-of-state purchases.
Conflicting tax codes never intended for uniformity across state lines are overwhelming small online retailers who are now forced to pay taxes to hundreds – and perhaps even thousands – of out-of-state municipalities.
This is a direct result of Wayfair v. South Dakota in which the Supreme Court ruled last June that states could collect sales taxes from online businesses far outside their state lines.
“It almost seems like I have another full time job dumped on me with this sales tax thing,” Chris Heitman, owner of Pegasus Auto Racing Supplies, told Reason.com. “It’s burning me out.”
For one thing, Heitman is having to learn the different rates of different states, and even when he does that, he has to worry about particular cities having their own taxes.
So, for example, if he has two customers out of thousands in one small town, he’s expected to know whether if the town charges sales tax and if so, at what rate.
Because the Supreme Court ruling is so new – and also so vague – there hasn’t been a lot of tax software developed yet to help small business owners navigate this maze of tax codes.
And the ruling may ultimately help large online retailers who can afford a team of employees to focus entirely on satisfying state and local taxes.
In response, Rep. Jim Sensenbrenner (R-Wis.) may reintroduce a bill entitled the Online Sales Simplicity and Small Business Relief Act that would exempt small retailers with under $10 million in sales from paying out-of-state sales tax.
“Small business owners, in particular, have shared fears that they will be unable to bear the new compliance burdens and may have to shutter their businesses,” Sensenbrenner said. “I’ve heard from online sellers in Wisconsin and across the country who are concerned with the complexity of the post-Wayfair tax regime.”
ABUJA, Nigeria – Nigeria's president was declared the clear winner of a second term in Africa's largest democracy early Wednesday, after a campaign in which he urged voters to give him another chance to tackle gaping corruption, widespread insecurity and an economy limping back from a rare recession.
While many frustrated Nigerians had said they wanted to give someone new a try, President Muhammadu Buhari , a former military dictator, profited from his upright reputation in an oil-rich nation weary of politicians enriching themselves instead of the people.
Speaking shortly after the announcement of the official results and as many Nigerians awakened to the morning prayer, Buhari told colleagues that he was "deeply humbled" by the win. He also said he regretted the loss of dozens of lives in election-related violence.
Supporters began dancing in the streets of the capital, Abuja, on Tuesday night as vote counting stretched his lead from the weekend election to nearly 4 million votes over top opposition challenger Atiku Abubakar, a billionaire former vice president who made sweeping campaign promises to "make Nigeria work again."
Buhari received 15.1 million votes, or 55 percent, the electoral commission said in making its official declaration. Abubakar received 11.2 million, or 41 percent. The average national turnout was 35.6 percent, continuing a downward trend.
In a failed last-ditch effort to stop the official declaration, Abubakar's party claimed that election data had been manipulated and demanded fresh elections in four of Nigeria's 36 states.
Buhari's party rejected the accusations. It also called on Abubakar, who hasn't made a public appearance since Saturday's election, to accept his loss gracefully and concede. "Let this nation move forward," campaign spokesman Babatunde Fashola said.
"There's no opposition that will roll over and play dead. Anybody that lost an election will always complain," Hameed Ali, the ruling party agent attending the vote declaration, told reporters.
The election, once described as too close to call, suffered from a surprise weeklong postponement and significant delays in the opening of polling stations. While election observers called the process generally peaceful, at least 53 people were killed in an attack claimed by the Islamic State West Africa Province extremist group and other violence, analysis unit SBM Intelligence said.
It remained to be seen whether Abubakar will follow through on pledges to accept a loss, or challenge the results. A former U.S. ambassador to Nigeria, John Campbell, said the troubled election had given the candidates grounds to go to the courts. That route could take months.
Many Nigerians have prayed for peace. They were surprised in 2015 when President Goodluck Jonathan took the unprecedented step of conceding to Buhari before official results were announced. It was the first defeat of an incumbent president by the opposition in the country's history.
"Jonathan set the benchmark on how electoral outcomes should be handled," Chris Kwaja, a senior adviser to the United States Institute of Peace, a U.S. government-backed institution promoting conflict resolution worldwide, told The Associated Press. "Accept defeat in the spirit of sportsmanship. This is a critical vehicle for democratic consolidation."
Nigerians were praised for their patience and resilience in this bumpy vote.
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Anna reported from Kano, Nigeria. Associated Press writer Sam Olukoya in Lagos, Nigeria, contributed to this report.
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Follow AP's full coverage of the Nigeria elections here: https://www.apnews.com/Nigeria
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Follow Africa news at https://twitter.com/AP_Africa
FILE PHOTO: Democratic Republic of Congo's outgoing President Joseph Kabila sits next to his successor Felix Tshisekedi during an inauguration ceremony whereby Tshisekedi will be sworn into office as the new president, January 24, 2019. REUTERS/ Olivia Acland/File Photo
March 15, 2019
By Stanis Bujakera
KINSHASA (Reuters) – Former Democratic Republic of Congo President Joseph Kabila’s coalition won a clear majority in senate elections on Friday, officials said, further undermining his successor Felix Tshisekedi’s ability to govern independently.
Opposition leader Tshisekedi won a surprise victory in the presidential election on Dec. 30 over Kabila’s hand-picked candidate, Emmanuel Ramazani Shadary. Kabila was barred by term limits from standing for a new term after 18 years in power.
But Kabila’s Common Front for Congo (FCC) coalition won about 70 percent of seats in the lower house of parliament and an overwhelming majority of provincial assembly seats in elections also held on Dec. 30.
Felix Momat, a senior FCC official, said the coalition had won more than 80 of 108 seats in the senate, or upper chamber, that were up for grabs in Friday’s elections, in which only the provincial assembly members can vote.
“Here is yet another demonstration that the biggest parliamentary majority belongs well and truly to the FCC in both chambers,” Momat told Reuters.
Jean-Baudouin Mayo, an official from Tshisekedi’s CACH coalition, acknowledged that the FCC had won a clear majority.
In addition to the 108 elected senators, Kabila automatically gets a seat in the upper chamber under Congo’s constitution as a former president.
KABILA INFLUENCE
The results of the parliamentary and provincial elections suggest Kabila will retain significant influence in Congo, a vast, mineral-rich central African country of about 80 million people.
During the presidential election campaign, Tshisekedi promised to make a clean break with Kabila’s tenure, which was marked by persistent corruption, deadly militia violence in the east and prodigious production of copper and cobalt that nevertheless failed to significantly improve living conditions.
Supporters of his opponent, Martin Fayulu, have accused Tshisekedi of striking a deal with Kabila to rig the presidential election when it became clear Kabila’s preferred candidate could not win.
Tshisekedi and Kabila’s camps both deny the election was rigged but acknowledge they are engaged in talks about cabinet appointments under a power-sharing deal in line with Congo’s semi-presidential system.
Friday’s senate elections have been marred by widespread accusations of corruption. About 20 candidates from across the political spectrum withdrew from their races over what they said were demands for bribes of tens of thousands of dollars.
Congo’s attorney general asked the electoral commission to postpone the vote over the allegations but it declined to do so.
Although Tshisekedi took office in January in Congo’s first-ever transfer of power via the ballot box, Kabila’s cabinet minister are still in place as negotiations over the nomination of a prime minister proceed.
Tshisekedi has made some breaks with Kabila-era policies, most recently by announcing on Tuesday that he would free three prominent political prisoners and 700 others jailed under his predecessor’s administration.
European Commission President Jean-Claude Juncker shows a bandage after his shaving injury, at the EC headquarters in Brussels, Belgium February 20, 2019. REUTERS/Yves Herman
February 20, 2019
BRUSSELS (Reuters) – Jean-Claude Juncker cut himself shaving on Wednesday — hardly news, even in the hothouse Brussels’ EU political bubble.
But there is a Brexit angle to everything these days and the EU chief executive felt obliged to tell reporters about why he was sporting a bandage on his cheek ahead of a meeting with Theresa May. He was worried, he said, that they might accuse the British prime minister of whacking him in frustration.
“I’m telling you so that you don’t think it was Mrs. May who gave me this injury,” the European Commission President told reporters during a brief appearance before meeting the premier.
He repeated that he was not expecting a breakthrough from the talks as May struggles to secure concessions from the EU that would secure parliamentary support for a Brexit deal before Britain leaves the European Union on March 29.
(Reporting by Alastair Macdonald, Editing by William Maclean; @macdonaldrtr)
The often embraced ‘cheat day’ is a common theme in many diets and the popular ketogenic diet is no exception. But new research from UBC’s Okanagan campus says that just one 75-gram dose of glucose — the equivalent a large bottle of soda or a plate of fries — while on a high fat, low carbohydrate diet can lead to damaged blood vessels.
“The ketogenic — or keto — diet has become very common for weight loss or to manage diseases like type 2 diabetes,” says Jonathan Little, associate professor in the School of Health and Exercise Sciences at UBCO and study senior author. “It consists of eating foods rich in fats, moderate in protein, but very low in carbohydrates and it causes the body to go into a state called ketosis.”
Little says the diet can be very effective because once the body is in ketosis and starved for its preferred fuel glucose, the body’s chemistry changes and it begins to aggressively burn its fat stores. This leads to weight loss and can reverse the symptoms of diseases like Type 2 diabetes.
“We were interested in finding out what happens to the body’s physiology once a dose of glucose is reintroduced,” says Cody Durrer, UBC Okanagan doctoral student and study first author. “Since impaired glucose tolerance and spikes in blood sugar levels are known to be associated with an increased risk in cardiovascular disease, it made sense to look at what was happening in the blood vessels after a sugar hit.”
A study from the UK finds that chemotherapy kills half of the patients — not the cancer, while a Harvard study finds that THC (the psychoactive portion of marijuana) cuts virulent strains of cancer by 50% after 3 weeks.
For their test, the researchers recruited nine healthy young males and had them consume a 75-gram glucose drink before and after a seven-day high fat, low carbohydrate diet. The diet consisted of 70 percent fat, 10 percent carbohydrates and 20 percent protein, similar to that of a modern ketogenic diet.
“We were originally looking for things like an inflammatory response or reduced tolerance to blood glucose,” says Durrer. “What we found instead were biomarkers in the blood suggesting that vessel walls were being damaged by the sudden spike in glucose.”
Little says the most likely culprit for the damage is the body’s own metabolic response to excess blood sugar, which causes blood vessel cells to shed and possibly die.
“Even though these were otherwise healthy young males, when we looked at their blood vessel health after consuming the glucose drink, the results looked like they might have come from someone with poor cardiovascular health,” adds Little. “It was somewhat alarming.”
The researchers point out that with only nine individuals included in the study, more work is needed to verify their findings, but that the results should give those on a keto diet pause when considering a cheat day.
“My concern is that many of the people going on a keto diet — whether it’s to lose weight, to treat Type 2 diabetes, or some other health reason — may be undoing some of the positive impacts on their blood vessels if they suddenly blast them with glucose,” he says. “Especially if these people are at a higher risk for cardiovascular disease in the first place.”
“Our data suggests a ketogenic diet is not something you do for six days a week and take Saturday off.”
Officials in Rockland County, NY declared a countywide state of emergency Tuesday as medical martial law has made it’s debut by banning unvaccinated children from public spaces. Mike Adams joins Alex to break down this dystopian development.
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Members of The Cranberries, bassist Mike Hogan, drummer Fergal Lawler and guitarist Noel Hogan speak to Reuters during an interview in London, Britain, April 24, 2019. REUTERS/Gerhard Mey
April 26, 2019
By Hanna Rantala
LONDON (Reuters) – Irish rockers The Cranberries are saying goodbye with their final album released on Friday, a poignant tribute to lead singer Dolores O’Riordan who died last year.
“In the End” is the eighth studio album from the band that rose to fame in the early 1990s with hits likes “Zombie” and “Linger”, and includes the final recordings by O’Riordan, who drowned in a London hotel bath in January 2018 due to alcohol intoxication.
Work on the album began during a 2017 tour and by that winter, O’Riordan and guitarist Neil Hogan had penned and demoed 11 tracks.
With O’Riordan’s vocals recorded, Hogan, bassist Mike Hogan and drummer Fergal Lawler completed the album in tribute to her.
“When we realized how strong the songs were, that was the deciding factor really… There was no point… trying to ruin the legacy of the band,” Noel Hogan said in an interview.
“It was obvious that Dolores wanted this album done because when you hear the album, you hear the songs and how strong they are, and she was very, very excited to get in and record this.”
The Cranberries formed in Limerick in 1989 with another singer. O’Riordan replaced him a year later and the group went on to become Ireland’s best-selling rock band after U2, selling more than 40 million records.
O’Riordan, known for her strong distinctive voice singing about relationships or political violence, was 46 when she died.
“She was actually in quite a good place mentally. She was feeling quite content and strong and looking forward to a new phase of her life,” Lawler said.
“A lot of the lyrics in this album are about things ending… people might read into it differently but it was a phase of her personal life that she was talking about.”
The group previously announced their intention to split after the release of “In The End”.
“We are absolutely gutted we can’t play (the songs) live because that’s something that’s been a massive part of this band from day one,” Noel Hogan said.
“A few people have said to us about maybe even doing a one off where you have different vocalists… as kind of guests of ours. A year ago that’s definitely something we weren’t going to entertain but I don’t know, I think it’s something we need to go away and take time off for the summer and have a think about.”
Critics have generally given positive reviews of the album; NME described it as “(seeing) the band’s career go full-circle” while the Irish Times called it “an unexpected late career high and a remarkable swan song for O’Riordan”.
Their early songs still play on the radio. This week, “Dreams” was performed at the funeral of journalist Lyra McKee, who was shot dead in Londonderry last week as she watched Irish nationalist youths attack police following a raid.
“We wrote them as kids, as a hobby and 30 years later they are on radio and on TV, like all the time… That’s far more than any of us ever thought we would have,” Noel Hogan said.
“That would make Dolores really happy because she was very precious about those songs. Her babies, she called them and to have that hopefully long after we’re gone… that’s all any band can wish for.”
(Reporting by Hanna Rantala; additoinal reporting by Marie-Louise Gumuchian; Writing by Marie-Louise Gumuchian; Editing by Susan Fenton)
2020 Democratic presidential candidate Elizabeth Warren participates in the She the People Presidential Forum in Houston, Texas, U.S. April 24, 2019. REUTERS/Loren Elliott
April 26, 2019
By Joshua Schneyer and M.B. Pell
NEW YORK (Reuters) – Senator Elizabeth Warren will introduce a bill Friday that offers new protections for U.S. military families facing unsafe housing, following a series of Reuters reports revealing squalid conditions in privately managed base homes.
The Reuters reports and later Congressional hearings detailed widespread hazards including lead paint exposure, vermin infestations, collapsing ceilings, mold and maintenance lapses in privatized base housing communities that serve some 700,000 U.S. military family members.
(View Warren’s military housing bill here. https://tmsnrt.rs/2Dy5aht)
(Read Reuters’ Ambushed at Home series on military housing here. https://www.reuters.com/investigates/section/usa-military)
The Massachusetts Democrat’s bill would mandate both regular and unannounced spot inspections of base homes by certified, independent inspectors, holding landlords accountable for quickly fixing hazards. The military’s privatization program for years allowed real estate firms to operate base housing with scant oversight, Reuters found, leaving some tenants in unsafe homes with little recourse against landlords.
The bill would also require the Department of Defense and its private housing operators to publish reports annually detailing housing conditions, tenant complaints, maintenance response times and the financial incentives companies receive at each base. The provisions aim to enhance transparency of housing deals whose finances and operations the military had allowed to remain largely confidential under a privatization program since the late 1990s.
The measure would also require private landlords to cover moving costs for at-risk families, and healthcare costs for people with medical conditions resulting from unsafe base housing, ensuring they receive continuing coverage even after they leave the homes or the military.
“This bill will eliminate the kind of corner-cutting and neglect the Defense Department should never have let these private housing partners get away with in the first place,” Warren said in a statement Friday.
The proposed legislation comes after February Senate hearings where Warren, a member of the Senate Armed Services Committee who is seeking the Democratic nomination for the 2020 U.S. presidential election, slammed private real estate firms for endangering service families, and sought answers about why military branches weren’t providing more oversight.
Her legislation would direct the Defense Department to allow local housing code enforcers onto federal bases, following concerns they were sometimes denied access. Warren’s office said a companion bill in the House of Representatives would be introduced by Rep. Deb Haaland, Democrat of New Mexico.
In response to the housing crisis, military branches are developing a tenant bill of rights and hiring hundreds of new housing staff. The branches recently dispatched commanders to survey base housing worldwide for safety hazards, resulting in thousands of work orders and hundreds of tenants being moved. The Defense Department has pledged to renegotiate its 50-year contracts with private real estate firms.
Congress has been quick to take its own measures. Earlier legislation proposed by senators Dianne Feinstein and Kamala Harris of California, along with Mark Warner and Tim Kaine of Virginia, would compel base commanders to withhold rent payments and incentive fees from the private ventures if they allow home hazards to persist.
FILE PHOTO: Offices of Deloitte are seen in London, Britain, September 25, 2017. REUTERS/Hannah McKay/File Photo
April 26, 2019
By Noor Zainab Hussain and Tanishaa Nadkar
(Reuters) – Deloitte quit as Ferrexpo’s auditor on Friday, knocking its shares by more than 20 percent, days after saying it was unable to conclude whether the iron ore miner’s CEO controlled a charity being investigated over its use of company donations.
Blooming Land, which coordinates Ferrexpo’s Corporate Social Responsibility (CSR) program, came under scrutiny after auditors found holes in the charity’s statements.
Ferrexpo on Tuesday said findings of an ongoing independent investigation launched in February indicated some Blooming Land funds could have been “misappropriated”. It did not provide any details or publish its findings.
Shares in Ferrexpo, the third largest exporter of pellets to the global steel industry, were 23.4 percent lower at 206.1 pence at 1022 GMT following news of Deloitte’s resignation.
“Ferrexpo’s shares are deeply discounted vs peers … following the resignation of Deloitte, we expect downside risks to dominate Ferrexpo’s shares near term.” JP Morgan analyst Dominic O’Kane said in a note on Friday.
Swiss-headquartered Ferrexpo did not provide a reason for the resignation of Deloitte, which declined to comment, while Blooming Land did not respond to a request for comment.
Funding for Blooming Land’s CSR activities is provided by one of Ferrexpo’s units in Ukraine and Khimreaktiv LLC, an entity ultimately controlled by Ferrexpo’s CEO and majority owner Kostyantin Zhevago, Ferrexpo said on Tuesday.
Ferrexpo’s board has found that Zhevago did not have significant influence or control over the charity, but Deloitte said it was unable reach a conclusion on this.
Reuters was not immediately able to contact Zhevago.
In a qualified opinion, a statement addressing an incomplete audit, Deloitte said it had been unable to conclude whether $33.5 million of CSR donations to Blooming Land between 2017 and 2018 was used for “legitimate business payments for charitable purposes”.
Deloitte said on Tuesday that total CSR payments made to Blooming Land by Ferrexpo since 2013 total about $110 million.
Ferrexpo, whose major mines are in Ukraine, has said that the investigation was ongoing and new evidence pointed to potential discrepancies.
Zhevago, 45, who ranked 1,511 on Forbes magazine’s list of billionaires for 2019 with a net worth of $1.4 billion, owns the FC Vorskla soccer club and has been a member of Ukraine’s parliament since 1998.
(Reporting by Noor Zainab Hussain and Tanishaa Nadkar in Bengaluru and additional reporting by Pavel Polityuk in Kiev; editing by Gopakumar Warrier, Bernard Orr)
Children walk past a damaged building in the aftermath of the Cyclone Kenneth in Pemba, Mozambique April 26, 2019 in this still image obtained from social media. SolidarMed via REUTERS ATTENTION EDITORS – THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT. NO RESALES. NO ARCHIVES
April 26, 2019
By Emma Rumney and Stephen Eisenhammer
JOHANNESBURG/LUANDA (Reuters) – Cyclone Kenneth killed at least one person and left a trail of destruction in northern Mozambique, destroying houses, ripping up trees and knocking out power, authorities said on Friday.
The cyclone brought storm surges and wind gusts of up to 280 km per hour (174 mph) when it made landfall on Thursday evening, after killing three people in the island nation of Comoros.
It was the most powerful storm on record to hit Mozambique’s northern coast and came just six weeks after Cyclone Idai battered the impoverished nation, causing devastating floods and killing more than 1,000 people across a swathe of southern Africa.
The World Food Programme warned that Kenneth could dump as much as 600 millimeters of rain on the region over the next 10 days – twice that brought by Cyclone Idai.
One woman in the port town of Pemba died after being hit by a falling tree, the Emergency Operations Committee for Cabo Delgado (COE) said in a statement, while another person was injured.
In rural areas outside Pemba, many homes are made of mud. In the main town on the island of Ibo, 90 percent of the houses were destroyed, officials said. Around 15,000 people were out in the open or in “overcrowded” shelters and there was a need for tents, food and water, they said.
There were also reports of a large number of homes and some infrastructure destroyed in Macomia district, a mainland district adjacent to Ibo.
A local group, the Friends of Pemba Association, had earlier reported that they could not reach people in Muidumbe, a district further inland.
Mark Lowcock, United Nations under-secretary-general for humanitarian affairs, warned the storm could require another major humanitarian operation in Mozambique.
“Cyclone Kenneth marks the first time two cyclones have made landfall in Mozambique during the same season, further stressing the government’s limited resources,” he said in a statement.
FLOOD WARNINGS
Shaquila Alberto, owner of the beach-front Messano Flower Lodge in Macomia, said there were many fallen trees there, and in rural areas people’s homes had been damaged. Some areas of nearby Pemba had no power.
“Even my workers, they said the roof and all the things fell down,” she said by phone.
Further south, in Pemba, Elton Ernesto, a receptionist at Raphael’s Hotel, said there were fallen trees but not too much damage. The hotel had power and water, he said, while phones rang in the background. “The rain has stopped,” he added.
However Michael Charles, an official for the International Federation of the Red Cross and Red Crescent Societies (IFRC), said heavy rains over the next few days were likely to bring a “second wave of destruction” in the form of flooding.
“The houses are not all solid, and the topography is very sandy,” Charles said.
In the days after Cyclone Idai, heavy inland rains prompted rivers to burst their banks, submerging entire villages, cutting areas off from aid and ruining crops. There were concerns the same could happen again in northern Mozambique.
Before Kenneth hit, the government and aid workers moved around 30,000 people to safer buildings such as schools, however authorities said that around 680,000 people were in the path of the storm.
(Reporting by Emma Rumney and Stephen Eisenhammer; Writing by Emma Rumney; Editing by Janet Lawrence and Alexandra Zavis)
FILE PHOTO: A worker holds a nozzle to pump petrol into a vehicle at a fuel station in Mumbai, India, May 21, 2018. REUTERS/Francis Mascarenhas
April 26, 2019
By Manoj Kumar and Nidhi Verma
NEW DELHI (Reuters) – Surging global oil prices will pose a first big challenge to India’s new government, whoever wins an election now under way, especially as domestic prices have been allowed to lag, meaning consumers are in for a painful surge as they catch up.
For oil-import dependent India, higher global prices could lead to a weaker rupee, higher inflation, the ruling out of interest rate cuts and could further weigh on twin current account and budget deficits, economists warned.
But compounding the future pain, state-run fuel suppliers and retailers have held off passing on to consumers the higher prices during a staggered general election, which began on April 11 and ends on May 23, according to sources familiar with the situation.
That delay is expected to be unwound once the election is over. And there could be additional price increases to make up for losses or profits missed during the period of delayed increases, the sources said.
In some major Asian countries, such as Japan and South Korea, pump prices are adjusted periodically so they move largely in tandem with international crude prices.
That was what was supposed to happen in India but the election means there have been many days when pump prices have been unchanged.
In New Delhi, for example, while crude oil prices have gone up by nearly $9 a barrel, or about 12 percent, in the past six weeks, gasoline prices have only risen by 0.47 rupees a liter, or 0.6 percent.
State-controlled fuel suppliers and retailers declined to say why they had delayed price increases, or discuss whether there has been any pressure from the government of Prime Minister Narendra Modi.
A government spokesman declined to comment.
The opposition Congress party said Modi’s government was violating its own policy of daily price revision by advising the state oil companies to hold prices steady.
“The government should cut fuel taxes otherwise consumers will have to pay much higher oil prices once the elections are over,” said Akhilesh Pratap Singh, a senior leader of the Congress party.
Nitin Goyal, treasurer at the All India Petroleum Dealers Association, representing fuel stations in 25 states, said prices were similarly held down for 19 days in the southern state of Karnataka last year, when it held state assembly elections.
Only for them to surge after the vote.
“Consumers should be ready for a rude shock of a massive jump in retail prices, similar to the level we have seen in the Karnataka state election,” Goyal said.
‘CREDIT NEGATIVE’
Sri Paravaikkarasu, director for Asia oil at Singapore-based consultancy FGE, said retail prices of gasoline and gasoil prices would have been up to 6 percent, or about 4 rupee, higher if they had been allowed to rise in line with global prices.
“Indian pump prices have failed to keep up with the recent uptrend in crude prices,” Paravaikkarasu said.
“With the country’s general elections underway, the incumbent government has been keeping pump prices relatively unchanged.”
India had switched to a daily price revision in June 2017 from a revision every two weeks, as the government allowed retailers to set prices.
But the government faced protests last October when retailers raised prices by up to 10 rupees a liter after the crude oil price went above $80 a barrel, forcing it to cut fuel taxes.
Global prices rose to their highest level in 2019 on Thursday, days after the United States announced all Iran sanction waivers would end by May, pressuring importers including India to stop buying Tehran’s oil. [O/R]
Higher oil prices will mean Asia’s third largest economy is likely to see growth of less than 7 percent rate this fiscal year, economists said. Growth slowed to 6.6 percent in the October-December quarter, the slowest in five quarters.
Rating agency CARE has warned that a 10 percent rise in global oil prices could increase demand for dollars, putting pressure on the rupee and widening the current account deficit.
India’s oil import bill rose by nearly one-third in the fiscal year ending March 31 to $140.5 billion, against $108 billion the previous year.
“The increase in international oil prices is a credit negative for the Indian economy,” ICRA, the Indian arm of the Fitch rating agency, said in a note.
“Every $10/ bbl increase in crude oil prices increases the fiscal deficit by about 0.1 percent of GDP.”
Any big price rise would also build a case for the central bank to keep rates steady, or even raise them.
The Reserve Bank of India’s Monetary Policy Committee, which cut the benchmark policy repo rate by 25 basis points this month, warned that rising oil and food prices could push up inflation.
Policymakers are worried that a sustained increase in the oil price in the range of $70-75/barrel or higher can move the rupee down by 3-4 percent on an annual basis.
The rupee has depreciated by 1.24 percent against the dollar since a year high in mid-March.
($1 = 70.1800 Indian rupees)
(Reporting by Manoj Kumar and Nidhi Verma; Editing by Martin Howell and Rob Birsel)
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