The Trump administration released its budget proposal for 2020 on Monday, which seeks to tackle the national debt by reducing spending while also shoring up border security infrastructure.
The proposal is a “pro-American” and “fiscally responsible” budget that aims to address America’s crippling national debt and porous borders, according to the White House.
President Trump's 2020 budget proposes more spending reductions than any administration in history. pic.twitter.com/U0CTOBHIBa
“The Trump Administration’s pro-growth policies have unleashed the American economy, creating millions of jobs and resulting in historically low unemployment,” said the White House statement.
“However, the national debt – currently more than $22 trillion – remains a grave threat to our economic and societal prosperity.”
Notable goals of the proposal are reducing domestic spending by $2.7 trillion over 10 years, balancing the Federal budget within 15 years, and allocating $8.6 billion for the Department of Defense to fund border wall construction.
Additionally, the budget proposal seeks to combat the opioid crisis by providing the Department of Justice with $330 million for local efforts to fight drug trafficking, and fully fund the Department of Veterans Affairs’ budget needs.
Dr. Nick Begich breaks down the booming middle class in Asia and exposes how the west’s economy has been systematically transferred eastward to allow for this financial boom, especially in China.
FILE PHOTO: U.S. Senator Elizabeth Warren (D-MA) speaks at a rally to launch her campaign for the 2020 Democratic presidential nomination in Lawrence, Massachusetts, U.S., February 9, 2019. REUTERS/Brian Snyder/File Photo
February 19, 2019
By Ginger Gibson
WASHINGTON (Reuters) – U.S. Senator Elizabeth Warren, a Democrat running for president, on Tuesday proposed a universal childcare program, paid for by a tax on high-net-worth individuals, to help families unable to find affordable care.
The program would be funded largely by the federal government and would use existing childcare facilities and in-home providers.
The proposed tax would apply to individuals with a net worth of $50 million or higher, which the senator from Massachusetts has dubbed the “Ultra-Millionare Tax.” Her campaign estimates the tax would generate $2.75 trillion in government revenue in 10 years.
“In the wealthiest country on the planet, access to affordable and high-quality child care and early education should be a right, not a privilege reserved for the rich,” Warren said in an online post explaining her proposal.
Warren is vying for the Democratic Party’s presidential nomination, hoping to challenge Republican President Donald Trump in the November 2020 election. The Democratic field has grown rapidly, pitting candidates like Warren in the party’s more liberal wing against moderates, who may be more reluctant to back expansive new federal programs.
Republicans are likely to criticize her proposal as being too expensive and dependent on a new tax that would harm the economy. Republicans have said childcare programs should be driven by the states, and not imposed by the federal government.
U.S. states generally offer public education beginning around age 5. There are no other public programs open to all children, and the average family pays thousands of dollars for day care. Programs like the federal government’s Head Start make preschool available to children from poor families.
Warren is not proposing the creation of a national school network, but using existing childcare options and then adding more.
Under her proposal, the cost of childcare would depend on a family’s income. Families that make 200 percent of the federal poverty line – currently about $50,000 or less for a family of four – would get childcare for free. For those who make more, their payments would be capped at 7 percent of income.
For example, according to Warren’s campaign, a family of four making $125,000 a year would pay no more than $8,750 a year for childcare. She compared that with the cost faced by a family in New Hampshire, which currently would pay about $21,000 a year for care for two children.
The program would not be mandatory, so families that opt to have a parent remain home and provide childcare could continue to do so.
(Reporting by Ginger Gibson; editing by Jonathan Oatis)
FILE PHOTO: Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. REUTERS/Aly Song/File Photo
April 25, 2019
(Reuters) – A capital raise for Tesla Inc will not come cheap and Chief Executive Officer Elon Musk must finally prove to investors that he can produce and deliver Model 3s and higher margin electric cars on time, Wall Street analysts said on Thursday.
After unveiling a $700 million loss in the first quarter, Musk conceded on Wednesday evening that he needed to pull in more capital for the car world’s highest profile venture of recent years.
Seven Wall Street brokerages asked by Reuters said they expected Musk to tap investors for between $1 billion and $3 billion in the near future.
The results also stressed the company’s paying off of $920 million in existing debt in the first quarter, but bond yields in the company surged on the news, while shares fell, as investors began to price in what that might cost.
In European trading before the start of the U.S. business day, investors were already demanding a record risk premium for holding Tesla’s $1.8 billion junk bond, pushing the yield on the 5.3 percent note due in August 2025 to the highest in six months at 8.51 percent.
Tesla shares, already down more than 20 percent this year, dipped 1.4 percent to $255.13 in early trade.
After months of uncertainty following Musk’s swiftly retracted claim last summer that he was set to take the company private, and a series of failures to meet production targets, they said the cost of new capital would now be far higher than a year ago.
“Obviously, investors would have appreciated that confession (to raise capital) when the shares were higher, the fundamental performance better and Elon Musk less erratic,” Evercore analyst Arndt Ellinghorst said in a note.
Tesla’s first quarter results disappointed both in terms of sales and a sharp drop in the number of vehicles delivered to global customers, and there was scepticism over promises of a return to profitability in the third quarter.
“Ultimately we believe the company’s guidance is aggressive,” analysts from Wedbush Securities said in a note to clients.
Musk has long resisted the need to raise capital, but he told a conference call with analysts it was now the right time.
Several analysts covering the company argued Tesla needed to simplify operations.
“For investors we think the question is whether or not people want to put capital into Tesla for Robo taxis and autonomous when Uber or Lyft or Nvidia could end up being better alternatives,” Roth Capital analyst Craig Irwin wrote.
“We don’t think Tesla would need to raise capital as urgently if they weren’t spending so much money on these initiatives outside of their core mission of producing awesome EV’s”.
CFRA analyst Garrett Nelson said Tesla’s timing – with the stock down more than 22 percent year-to-date – is quite inopportune to raise capital and that Tesla should have completed an equity issuance months ago.
(Reporting by Vibhuti Sharma and Tanvi Mehta in Bengaluru; Writing by Patrick Graham, editing by Bernard Orr)
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New bollard-style U.S.-Mexico border fencing is seen in Santa Teresa, New Mexico, U.S., March 5, 2019. REUTERS/Lucy Nicholson
March 27, 2019
By Phil Stewart
MIAMI (Reuters) – Acting U.S. Defense Secretary Patrick Shanahan said on Wednesday he would push ahead with plans to transfer $1 billion to help fund President Donald Trump’s wall on the U.S. border with Mexico, even as he acknowledged a likely backlash from Congress.
Democratic Representative Adam Smith, chairman of the House Armed Services Committee, said on Tuesday that the panel did not approve the proposed shift in Pentagon expenditure. Any decision to go ahead anyway could prompt Congress to create new restrictions that could impact the Pentagon in the future.
Asked whether his plan was to move ahead regardless, Shanahan said: “Yes, it is.”
“There are going to be consequences. I understand the position of the committees. I also have a standing legal order from the commander-in-chief,” he said.
Congress could attempt to cut off the Pentagon’s authority to reprogram funds, something Smith hinted at during the hearing.
Asked whether he expected Smith to follow through, Shanahan said: “I would expect that to happen.”
Still, the Pentagon insists it has the authority to shift the $1 billion.
The House failed on Tuesday to override Trump’s first veto of the “national emergency” he declared last month to build a U.S.-Mexico border wall that Congress has not funded.
Smith told the hearing that Trump’s proposed $750 billion defense budget would not pass as it was proposed. That budget included $100 billion in a “slush fund” meant to fund ongoing wars but which the Pentagon intends to use to boost the amount of money it has available to avoid budget caps.
Shanahan said losing the ability to reprogram funds could present problems for Pentagon planners, who have to shift resources around to deal with natural disasters and other emergencies.
“It’s a very difficult situation and … we’re going to have to be artful to manage this,” he said. “I don’t think it’s going to be easy.
(Reporting by Phil Stewart; additional reporting by Idrees Ali and Patricia Zengerle; Editing by Sandra Maler)
Brooke Johns is now facing a disorderly conduct charge after letting her 3-year-old son urinate in the parking lot of a gas station, reports say. (Fox 5 Atlanta)
A pregnant mom in Georgia -- who is expected to give birth later this month -- is now facing a court date for a disorderly conduct charge after she reportedly let her 3-year-old urinate in a gas station parking lot.
Brooke Johns told FOX5 Atlanta she was driving around Augusta on Wednesday when her son alerted her he needed to make a pit stop. Johns says she pulled into a gas station parking lot and, after being unable to carry the child inside, let him urinate outside while covering him. That attracted the attention of a nearby police officer.
"I said 'accidents happen.' And he was like – ‘take him in the bathroom,’" Johns said to the station. "What if I would have ran in the bathroom and someone had been in there? What was I going to let him do? Pee on the floor of the gas station?"
Johns now has a court date at the end of the month -- just days before she is due with her next child, FOX5 Atlanta reported.
The judge that is assigned to the case could drop the charges, but if not, Johns reportedly faces up to a thousand dollars in fines and 60 days of jail time.
Andy Byford arrives at the Bowling Green Station to begin his first day as MTA New York City Transit President on Tue., January 16, 2018. Byford was only the 21st-highest earner in the MTA last year. (Marc A. Hermann / MTA New York City Transit)
Riders get slapped with fare hikes — while these guys ride the gravy train.
The MetropolitanTransportation Authority’s top earner last year raked in a budget-busting $344,147 in overtime — on top of his $117,499 salary, according to data released Tuesday by the Empire Center fiscal-watchdog group.
While delays on the Long Island Rail Road hit a 19-year high in 2018, chief measurement operator Thomas Caputo brought home a fat $461,646 paycheck — more than anyone else at the agency, and $164,027 more than he earned the year before.
And yet the MTA couldn’t even explain how many hours Caputo worked last year, or what his overtime rate was.
“Looking into Caputo,” spokesman Shams Tarek told The Post Tuesday afternoon — then failed to respond to multiple follow-up queries.
After five hours, all he could explain is what a chief measurement operator does — claiming Caputo is “one of only a few people” who can operate an “advanced track-geometry car,” which examines the rails for defects.
Tarek said Caputo retired this month after 30 years on the job — and his hefty final pay year could give a boost to his pension.
The news comes right after the LIRR on Sunday hit riders with fare hikes of up to $15 on monthly tickets and $5.75 on weeklies. Customers say the humongous worker paychecks are a slap in the face.
“This is outrageous,” said Dini Morbillo, 56, a physician who spends $275 a month on her LIRR pass and gasped when she heard what Caputo took home.
“He is making more than me — who the hell is Thomas Caputo? Why isn’t there transparency?”
Overtime payments surged to more than $1.3 billion across the entire MTA last year, up from $1.2 billion the year before, according to Empire Center data.
Of that, the LIRR shelled out $224.6 million for overtime, up nearly $50 million from the previous year’s $175.4 million.
And yet that same year, the commuter rail line’s on-time performance dropped to its worst levels in nearly two decades.
Nine of the top 10 overtime earners in the MTA in 2018 worked for the LIRR.
They include surfacing foreman Dallas Bazemore III, who made $279,289 in overtime.
Track worker Marco Pazmino earned a regular salary of just under $55,000, but fattened his pay with another $256,177 in OT.
Meanwhile, New York City Transit chief Andy Byford — the man charged with fixing the Big Apple’s dilapidated subway system — was only the 21st highest earner in the MTA last year, taking home $313,468.
Even LIRR workers were outraged at what some of their colleagues are raking in.
“This guy is making almost $500,000?! Wow. I don’t even knowwh at a chief measurement operator is; all I know is I want in that,” said one customer-service worker, who wouldn’t give his name. “I’m in the wrong department.”
Tarek justified the megasized paychecks by saying the agency has been working on major upgrades recently, and claiming it is often cheaper to pay an existing employee overtime than to hire another person for the same work.
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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