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By:

Correspondent

21 August 2024 at 10:20:16 am

Fuel Shock

The latest increase in petrol and diesel prices — the fourth hike in just 11 days — underlines how vulnerable India remains to geopolitical turmoil and its own unfinished reforms in the energy sector. Brent crude surged again after fresh American military strikes in southern Iran deepened fears of the renewal of the Iran conflict on a higher scale. Markets are now gripped by uncertainty as hopes of a negotiated settlement continue to fade. For a country like India, which imports more than 80...

Fuel Shock

The latest increase in petrol and diesel prices — the fourth hike in just 11 days — underlines how vulnerable India remains to geopolitical turmoil and its own unfinished reforms in the energy sector. Brent crude surged again after fresh American military strikes in southern Iran deepened fears of the renewal of the Iran conflict on a higher scale. Markets are now gripped by uncertainty as hopes of a negotiated settlement continue to fade. For a country like India, which imports more than 80 percent of its crude oil requirements, every geopolitical tremor in the Gulf quickly translates into pain at the fuel pump. Since May 15, petrol and diesel prices have risen cumulatively by nearly Rs. 7.5 per litre. In Hyderabad and Thiruvananthapuram, petrol has crossed Rs. 115 a litre. Mumbai, Kolkata, Bengaluru and Chennai are all witnessing sharp increases. Even Delhi, traditionally cushioned by relatively lower taxes, has seen petrol move beyond Rs. 102 per litre. This marks a significant shift after nearly four years of relative stability in retail fuel prices. For long periods, state-run oil marketing companies absorbed the burden of elevated crude prices, shrinking refining margins and a weakening rupee. Political considerations, particularly around elections, often delayed price revisions. The Rs. 2 per litre reduction announced ahead of the 2024 national elections was a reminder that fuel pricing in India has never been entirely divorced from politics. But oil companies cannot indefinitely absorb mounting losses, especially when global crude prices remain elevated. The Centre has already cut excise duties, with Finance Minister Nirmala Sitharaman estimating the revenue sacrifice at nearly Rs. 1 lakh crore. That fiscal cushion has now largely been exhausted. The spotlight is therefore shifting towards states. VAT on fuel remains one of the most lucrative revenue streams for state governments, with some states imposing levies exceeding 30 percent through taxes and cess components. This explains why states such as Telangana, Kerala and West Bengal continue to record some of the highest retail fuel prices in the country. The Centre is now subtly nudging states to reduce VAT rates to soften the blow on consumers. Yet states are reluctant. Their dependence on fuel taxes is structural, not incidental. Apart from excise on liquor, few revenue sources offer such steady and politically manageable returns. Bringing petrol and diesel under the GST framework continues to face bipartisan resistance from states fearful of losing fiscal autonomy. Rising fuel prices do not remain confined to petrol stations. They seep into every layer of the economy as transportation costs rise, food inflation accelerates and household budgets shrink. Small businesses, already coping with weak consumption and high borrowing costs, are facing renewed pressure. India’s recurring vulnerability to crude oil shocks exposes the limits of its energy security architecture. Expansion of strategic petroleum reserves and greater investment in renewable energy can no longer remain aspirational talking points. They must become urgent national priorities.

Earthquake of the century rocks Thailand, Myanmar

The previous powerful tremor was recorded in 1912

Bangkok: A 7.7 magnitude earthquake rocked Thailand and neighbouring Myanmar midday on Friday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed, and prompting Myanmar to declare a widespread state of emergency.


The midday temblor with an epicentre near Mandalay, Myanmar's second largest city, was followed by a strong 6.4 magnitude aftershock.


Myanmar's military-run government declared a state of emergency in six regions and states including the capital Naypyitaw and Mandalay, but with the country in the midst of a prolonged bloody civil war it was not clear how help would get to many regions.


The Red Cross said downed power lines are adding to challenges for their teams trying to reach Mandalay and Sagaing regions and southern Shan state.


“Initial reports from the ground suggest the earthquake has caused significant damage,” the Red Cross said. “Information on humanitarian needs is still being gathered.”


Building collapsed

In Bangkok, a construction worker was killed when rubble from the collapsing building site hit his truck and another was crushed by the falling debris, rescue worker Songwut Wangpon told reporters.


Defence Minister Phumtham Wechayachai said in all three people were killed at the site and 90 are missing. He offered no more details about the ongoing rescue efforts but first responders said that seven people had been rescued so far from outside the collapsed building.


Rescue workers say the rubble is still too unstable for them to try and find people possibly trapped beneath.


A dramatic video of the building's collapse near Bangkok's popular Chatuchak market circulated on social media showed the multi-story building with a crane on top toppling into a cloud of dust, while onlookers screamed and ran.


Elsewhere, people in Bangkok evacuated from their buildings were cautioned to stay outside in case there were more aftershocks.


The US Geological Survey and Germany's GFZ center for geosciences said the earthquake was a shallow 10 kilometers (6.2 miles), according to preliminary reports.


'Soil liquefaction caused severe damage'

New Delhi: India's earthquake monitoring agency NCS said the temblor that struck Myanmar and Thailand Friday afternoon caused severe damage because its shaking frequency matched the natural vibration of buildings.


Soil liquefaction -- when soil loses its characteristics and behaves like thick liquid -- was also one of the reasons for damage, O P Mishra, the head of the National Centre for Seismology (NCS), said.


Thailand's capital, Bangkok, which is over a thousand kilometres from the epicentre in Mandalay, Myanmar, suffered significant damage as the rupture's direction was toward it, he said.


The NCS said that seven aftershocks, ranging in magnitude from 3.5 to 7, followed the main earthquake of magnitude 7.5, which struck Mandalay around 11:50 am (IST).


Northeast India also felt the main earthquake and its aftershocks.


The agency said the earthquake was caused by the Sagaing Fault, a major fault line located 1,200 km east of the Indo-Burma subduction zone. The energy from the earthquake spread toward Bangkok, Thailand. Another major reason for the damage was that the earthquake's shaking frequency matched the natural vibration of buildings, making them more vulnerable, the NCS said. "The rupture direction is towards Bangkok, Thailand, causing severe damage to structures in the region due to liquefactions and matching of earthquake shaking frequency with the spectral frequency of the structures," it said.


It said the region has experienced major earthquakes in the past, including a magnitude 7.5 earthquake in 1912 and a magnitude 7.2 earthquake in 1956.


At least 144 people killed, 730 injured

At least 144 people were killed and 730 injured in Myanmar, where photos and video from two hard-hit cities showed extensive damage.


The full extent of death, injury and destruction was not immediately clear — particularly in Myanmar, one of the world's poorest countries. It is embroiled in a civil war and information is tightly controlled.


The head of Myanmar's military government said in the televised speech on Friday evening that at least 144 people were killed and 730 others were injured.


“The death toll and injuries are expected to rise,” Senior Gen Min Aung Hlaing said.


Photos from the capital of Naypyidaw showed multiple buildings used to house civil servants destroyed by the quake, and rescue crews pulling victims from the rubble.


Myanmar's government said blood was in high demand in the hardest-hit areas.


Images of buckled and cracked roads in Mandalay and damaged highways as well as the collapse of a bridge and dam raised further concerns about how rescuers would even reach some areas in a country already enduring a widespread humanitarian crisis.

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