Petrol, diesel: PIDE suggests annual review of OMC, dealer margins

PIDE suggests that the CPI estimated in the federal budget may be considered as the base for any increase in margins in the future. PHOTO: FILE

ISLAMABAD: 

A study conducted by Pakistan Institute of Development Economics (PIDE) has recommended annual review of margins of oil marketing companies (OMCs) and dealers based on mark-up on assets and the Consumer Price Index (CPI) published by the State Bank of Pakistan (SBP).

However, after going through the proposed mechanism, the Ministry of Petroleum and Natural Resources has suggested that the CPI estimated in the federal budget might be considered as the base for any increase in margins in the future. It should be subject to the condition that margins should not exceed 3% of the sum of ex-refinery prices of each of the petroleum products and inland freight equalisation margin.

In a summary sent to the Economic Coordination Committee (ECC) for discussion in a meeting on February 13, the ministry said PIDE had also proposed annual review of margins and a separate formula for calculating the margins of OMCs and dealers.

The formula proposed by PIDE was based on 30% mark-up on assets/investments and the CPI announced by the central bank.

According to sources, the ministry submitted the summary in haste and sought comments of stakeholders including the Finance Division, Planning Commission, Federal Board of Revenue and Oil and Gas Regulatory Authority during the meeting. However, the ECC asked the ministry to seek views of the ministries and departments concerned in writing and then bring the summary again for approval.

In its report, PIDE took into account various cost factors of OMCs and dealers separately. Based on its findings and analysis of expenditures and existing margins as well as keeping in view the importance of oil industry in the economy, PIDE recommended an upward revision in margins.

For petrol, it proposed an increase of Rs0.63 per litre for OMCs and Rs0.64 per litre for dealers and for high-speed diesel, it suggested Rs0.82 per litre for OMCs and Rs0.81 per litre for dealers.

However, for consumers, the increase was estimated at Rs1.49 per litre in petrol and Rs1.91 per litre in diesel including the impact of general sales tax.

The ministry told the ECC that OMCs were willing to implement PIDE recommendations, but the dealers demanded an increase of 53% in petrol margin and 52% in diesel margin, which it said was unrealistic.

The ministry had proposed deregulation of petrol margins for six months. However, it suggested an increase of Rs0.16 per litre in diesel margin for OMCs and Rs0.40 per litre for dealers.

Now, sources said, OMCs opposed the deregulation of dealer margins, saying they would not take any responsibility of the dealers in case they manipulated the situation.

OMCs wanted to fix petrol margins for themselves as well as dealers. “Consultation in this regard is under way and a summary will be tabled again before the ECC while seeking comments of other ministries and departments,” an official said.

Reforms unit rebranded: Overlapping of work runs contrary to austerity drive

According to revised terms of references, the rebranded IERU will work in close partnership with all stakeholders, including the private sector. CREATIVE COMMONS

ISLAMABAD: 

While going against its drive to consolidate different posts to cut expenditures, the Ministry of Finance has kept intact functions of a newly created slot in the Planning Commission during restructuring of the Economic Reforms Unit (ERU) in a bid to justify existence of the unit.

The ERU – originally set up to reform and restructure state-owned enterprises – has now been given the work of Actuary Office and Pension Fund while taking this function away from the regulation wing of the Ministry of Finance. But it retained all functions related to development of private sector in the country, sources say.

ERU’s name has also been rebranded as Implementation and Economic Reforms Unit (IERU) and it has been placed under Ministry of Finance Adviser Rana Assad Amin while taking it away from the administrative control of Finance Secretary Dr Waqar Masood.

To develop the private sector, Prime Minister Nawaz Sharif has already approved a new post of member private sector development and competitiveness in the Planning Commission, which falls within the purview of Minister for Planning, Development and Reform Ahsan Iqbal.

The move of the Ministry of Finance yet again indicates lack of coordination between the ministries.

The member is entitled to a salary of Management Pay Scale-I (MP-I), which is Rs5.8 million per annum, according to a notification of the finance ministry. After the creation of the post, the ministry has also approved budget for the member private sector.

To appoint the member, the Ministry of Planning has already sent a summary, seeking the premier’s nod to pick one of the three proposed candidates, according to the sources.

The duplication of work was not only against the spirit of austerity drive, but would also add to the pressure on national exchequer due to existence of two offices to perform one task, said the sources. Recently, the government has cut posts in foreign missions to save roughly Rs2 billion annually.

According to revised terms of references, the rebranded IERU will work in close partnership with all stakeholders, including the private sector. It will formulate a private sector development strategy.

It will review existing laws, rules and regulations pertaining to business environment that are obsolete, overlapping and inconsistent or unduly add to the cost of doing business. The unit will act as quality filter for new regulations and propose changes that stimulate private sector development, improve transparency, reduce cost and are consistent with international best practices.

According to the sources, the Board of Investment is already working on a plan to reduce the cost of doing business. The plan was approved by the International Monetary Fund during recently concluded talks in Dubai.

Responding to a question about duplication of work and implications for the public exchequer, Finance Minister Ishaq Dar said the ERU had been working on private sector development for years and restructuring was done to ensure quick implementation of decisions.

New head

The contract of Ministry of Finance Adviser Rana Assad Amin is going to expire in two months. While giving him extension earlier, the Prime Minister’s Office had written on his file that this would be the last extension. The government has also placed a ban on extending contracts of its employees.

Since Amin was a close confidant of Dar and playing a key role in the Ministry of Finance, there was a possibility that the government could keep him, but his job title might be changed, said the sources.

The contract of current ERU Director General Najeeb Khaqan is going to expire in May and there are chances that Amin could be appointed as the head of IERU, as the unit has already been placed under his command.

Statehood demand in US: plan to split California into 6 picks up -

Visitors watch the sunset from atop the bluffs at Natural Bridges State Beach in Santa Cruz, California. (AP Photo/Marcio Jose Sanchez)

A plan to divide California into six separate US states is closer to making it on to a November ballot, with organizers gaining approval to collect signatures.

The seemingly far-fetched initiative, sponsored by Silicon Valley venture capitalist Tim Draper, claims "political representation of California's diverse population and economies has rendered the state nearly ungovernable."

And on Tuesday, the California Secretary of State's office gave the movement a boost, saying that proponents "may begin collecting petition signatures."

At least 807,615 voters--representing eight percent of the total ballots cast for governor in the 2010 election -- will need to sign the petition by July 18 to make it on to the ballot.

The proposal aims to split the state--America's most populous with around 38 million inhabitants--into "six smaller state governments, while preserving the historical boundaries of the various counties, cities and towns."

In 2012, California was tied with Russia and Italy--all with a GDP of approximately $2.0 trillion--for eighth place in world GDP rankings, according to the Center for Continuing Study of the California Economy.

The proposal would create a state out of Silicon Valley, home to tech giants Google, Facebook and Apple. It would also create South California, which would include Hollywood and the US entertainment industry. West California, Central California, North California, and Jefferson in the most northern part of the state, would also go it alone.

According to the proposal, voters overwhelming approved dividing California in two in 1859, but Congress did not act due to the Civil War. Draper, who has funded more than 400 companies including Skype and Baidu, is founder of venture capital firm Draper Fisher Jurvetson in Menlo Park, California.

Security flaw could allow hackers to beat Mac, iPhone encryption, admits Apple

Apple's iPhone

A major flaw in Apple Inc software for mobile devices could allow hackers to intercept email and other communications that are meant to be encrypted, the company said on Friday, and experts said Mac computers were even more exposed.

If attackers have access to a mobile user's network, such as by sharing the same unsecured wireless service offered by a restaurant, they could see or alter exchanges between the user and protected sites such as Gmail and Facebook. Governments with accss to telecom carrier data could do the same.

"It's as bad as you could imagine, that's all I can say," said Johns Hopkins University cryptography professor Matthew Green.

Apple did not say when or how it learned about the flaw in the way iOS handles sessions in what are known as secure sockets layer or transport layer security, nor did it say whether the flaw was being exploited.

But a statement on its support website was blunt: The software "failed to validate the authenticity of the connection."

Apple released software patches and an update for the current version of iOS for iPhone 4 and later, 5th-generation iPod touches, and iPad 2 and later.

Without the fix, a hacker could impersonate a protected site and sit in the middle as email or financial data goes between the user and the real site, Green said.

After analyzing the patch, several security researchers said the same flaw existed in current versions of Mac OSX, running Apple laptop and desktop computers. No patch is available yet for that operating system, though one is expected soon.

Because spies and hackers will also be studying the patch, they could develop programs to take advantage of the flaw within days or even hours.

The issue is a "fundamental bug in Apple's SSL implementation," said Dmitri Alperovich, chief technology officer at security firm CrowdStrike Inc. Adam Langley, a senior engineer at Google, agreed with CrowdStrike that OS X was at risk.

Apple did not reply to requests for comment. The flaw appears to be in the way that well-understood protocols were implemented, an embarrassing lapse for a company of Apple's stature and technical prowess.

The company was recently stung by leaked intelligence documents claiming that authorities had 100% success rate in breaking into iPhones.

Friday's news suggests that enterprising hackers could have had great success as well if they knew of the flaw.

Poverty in India 2.5 times the official figure: Study

A study by McKinsey Global Institute says more than 680 million Indians are unable to meet their essential needs which means that poverty in the country is 2.5 times the official figure of 270 million.

AP

New Delhi: Pursuing an "inclusive reforms" agenda that boosts investments and generates more jobs will help to significantly reduce poverty in India, where over half of the population struggle to meet their essential needs, McKinsey Global Institute (MGI) said on Wednesday.

MGI, business and economics research arm of global consultancy major McKinsey & Company, has also projected that India could achieve an economic growth of 7.8 per cent over the next decade provided the country implements inclusive reforms.

"...an economically sound path of 'inclusive reforms'-one in which India takes steps to stimulate investment, job creation, and farm productivity and to dramatically improve the effectiveness of basic services.

"These reforms could significantly reduce poverty and potentially allow India to achieve an average GDP growth rate of 7.8 per cent between 2012 and 2022," MGI said in a report titled 'From poverty to empowerment: India's imperative for jobs, growth, and effective basic services'.

The report estimated that on an average, just half of the public money spent on basic services actually reaches the people as real benefits.

"...in the absence of reforms in basic services delivery, this level of ineffectiveness would persist, constraining the impact of higher spending.

If the current slow pace of growth continues and no major reforms are undertaken, more than one-third of the population would remain below the Empowerment Line in 2022 and 12 per cent would remain trapped in extreme poverty," said Shirish Sankhe, director McKinsey & Member of MGI Council.

Coining the term 'Empowerment Line' for people able to meet basic needs of food, energy, housing, drinking water, sanitation, health care, education, and social security, it said more than half of India's population lacks means to meet these needs.

"...we find that 56 per cent of the population lacks the means to meet their essential needs. By this measure, some 680 million Indians experience deprivation - more than 2.5 times the population of 270 million below the official poverty line."

India needs to add 115 million new non-farm jobs over next decade to accommodate a growing population, reduce share of agriculture in employment and improve farm yield.

Public spending on basic services needs to grow at 6.7 per cent annually, nearly doubling from Rs 570,000 crore in 2012 to Rs 1,088,000 crore in 2022, the report said.

Delivery of basic services can be enhanced from 50 per cent per cent to 75 per cent by private and social sector partnership, community participation, use of technology to streamline operations and monitoring of outcomes, it added.

US 'not targeting' India companies, says FDA chief

In continuing battle between Indian pharma companies and the US’ Food and Drug Administration, Commissioner Margaret Hamburg defends FDA’s position

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Reuters

Washington: The United States is "not targeting" Indian companies but has a strict quality control regime for all products being imported into America, the head of the US Food and Drug Administration said on Saturday.

"We are not targeting Indian companies. We are undertaking our required regulatory activities. We inspect and take appropriate action against companies within the United States," US Food and Drug Administration (FDA) Commissioner Margaret Hamburg told reporters during a conference call.

"When products are sold in the United States for use by American citizens, then those products have to meet our regulatory standards and requirements and we inspect those facilities in other countries as well," she told reporters after her first official trip to India, where she met with government and industry leaders earlier this month.

"Inspections are routine part of our regulatory process. So what happens in India, is consistent with what happens within the US and throughout the world," she said responding to a series of questions on the recent actions taken against several Indian pharma companies, Ranbaxy in particular.

Hamburg said the FDA is planning to expand its staff in India to 19 from 12 as it tries to assure the safety of medications from India.

Describing India as a nation which is of "particularly important" to US food and drug trade, she said the fact the US has increased its presence in India reflects that India is a very significant and growing player in the US marketplace with respect to both pharmaceutical products and food.

During her over a week-long travel to India from February 10 to 18, the two countries signed their first statement of intent to cooperate in the field of medical products.

Hamburg said the US wants to ensure the quality and availability of the products, "That is our greatest goal and we do think that, the work in India is important to that overall effort because they are such a significant supplier of drugs to this country."

The FDA chief said she has already visited China twice and other countries as well and plans to continue to engage with other nations.

"India, such an important player, needs to be a full participant at the table," she said in response to a question.

Hamburg said there needs to be a global coalition of regulators as they together try to address the challenges of an increasingly complex globalized world.

Tearful reunions as divided Koreans meet after 60 years

Reuters

Image for representational purpose only

Sokcho (South Korea): Several hundred elderly South and North Korean relatives clung to each other, rocking and weeping, and trading photos and faded memories as they met after 60 years Thursday at a reunion for families divided by the Korean War.

The emotional gathering at North Korea's Mount Kumgang resort was the result of tortuous, high-level negotiations between Pyongyang and Seoul, which had nearly broken down over the North's objections to overlapping South Korea-US military drills.

Television footage showed snow falling hard as 82 South Koreans -- some so frail they had to be stretchered indoors -- arrived at the resort in a convoy of buses to meet 180 North Korean relatives they have not seen for decades.

Inside the main hall, where numbered tables had been laid out, there were moving scenes as divided brothers, sisters, uncles, aunts, step-siblings and in-laws sought each other out and then collapsed into each others' arms.

One of the oldest South Koreans, a 93-year-old man who was separated from his pregnant wife during the 1950-53 conflict, met the now 64-year-old son he had never seen.

"So old," were his first words as they came face-to-face -- the resemblance strikingly clear to people watching.

"Let me hug you," the father said and then, sobbing, they both embraced.

Nearly all the participants had brought photographs, either tattered, black and white images of the family before it was split up, or brand new colour snaps of their current families.

These were then passed around, stroked and cried over.

- 'Big sister. It's me!' - Some of the reunions proved particularly traumatic, with one North Korean woman, Lee Jung-Sil desperately searching for recognition from her South Korean older sister, Lee Young-Sil, 87, an Alzheimers sufferer.

"Big sister. It's me! Why can't you hear me?" Jung-Sil entreated, tears streaming down her face.

The North Korean women wore traditional hanbok dresses, while the men were mostly dressed in dark suits. All seemed to be sporting badges of former leaders Kim Il-Sung and Kim Jong-Il -- obligatory accessories in North Korea.

A grand dinner was planned for the evening and on Friday the reunited relatives were to be given the chance for more private gatherings in their guest rooms.

The South Koreans, with an average age of 84, had left the eastern port city of Sokcho at 8:30am on board 10 buses.

The departure was delayed as two woman needed medical attention, and ended up being taken in ambulances for the entire journey.

More than a dozen were in wheelchairs and needed help getting on and off the buses, which they shared with 58 family members, brought along for physical as well as emotional support.

BAGS OF GIFTS

All carried bags stuffed with gifts, ranging from basic medicines to framed family photos and packets of instant noodles.

"The gifts I'm bringing to my sister should be good. Something you can't see much in North Korea so I hope she will be happy," said Kim Se-Rin, 85.

"I've also included some US dollars for her and my younger brother," Kim said.

The reunion came just days after the publication of major UN report that amounted to a searing indictment of Pyongyang's rights record, detailing murder, enslavement, torture, imprisonment, rape and forced abortions.

Millions of Koreans were separated by the 1950-53 war, and the vast majority have since died without having any communication at all with surviving relatives.

The reunion programme began in earnest after a historic North-South summit in 2000, but the waiting list has always been far larger than the numbers that could be accommodated.

For many people, time simply ran out. Last year alone 3,800 South Korean applicants for reunions died.

For all the joy the meetings bring, it is tempered by the realisation that -- given the participants' advanced ages -- it also marks a final farewell.

"This will be our first and last reunion," Kim Dong-Bin, 81, said of the elder sister he left decades ago in Pyongyang.

All the South Koreans had spent Wednesday night in a Sokcho hotel, where they received a lecture by South Korean officials advising them to avoid political issues.

Before boarding the buses to cross the heavily-militarised border, they spoke of their hopes and anxieties ahead of the meetings they had dreamed of for so long.

"I think when I see her face, I won't believe it's real," Kim said of his sister.

"I wonder if I will be able to recognise her immediately? It's been so long," he added.

It was the first meeting of divided families since the reunion programme was suspended following the North's shelling of a South Korean border island in 2010.