Covid Scam: Action on panel report after cabinet approval, says Siddaramaiah
Bengaluru/Hubballi, Nov 10: Karnataka Chief Minister Siddaramaiah on Sunday said the investigation into the COVID-19 pandemic related irregularities will start after the cabinet approval.
He said the sub-committee was examining the report given by the Justice Michael D' Cunha Commission of Inquiry which investigated alleged irregularities in the purchase of equipment and medicines during the Covid 19 pandemic when the BJP was in power.
"It has not come before the cabinet. The sub-committee is examining the report. Once the sub-committee submits its report, we will discuss that in the cabinet," Siddaramaiah told reporters in Hubballi.
Karnataka Health Minister Dinesh Gundu Rao had said on Saturday that the Commission has recommended for the prosecution of Yediyurappa and former minister B Sriramulu in connection with the alleged irregularities in purchase of equipment and medicines during the pandemic.
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The Karnataka government on October 11 decided to constitute a Special Investigation Team (SIT) and a Cabinet sub-committee to take further action on the D' Cunha commission report. In the "partial" report submitted on August 31 in 11 volumes, the Commission examined the expenditure to the tune of Rs 7,223.64 crore.
Yediyurappa had said there was no question of getting scared by "these threats".
The government was trying to create confusion by digging into the past and this will not serve any purpose, he added.
Reacting to Yediyurappa's comments, Siddaramaiah said, "These are not empty threats. We have formed a Commission headed by Justice Michal D'Cunha. Based on his report criminal action will be taken."
"Let's see what he (Yediyurappa) will do after the criminal action is initiated," Siddaramaiah added.
"Judiciary is meant for delivering justice. Isn't it for punishing those who have committed wrong," he sked.
Home Minister G Parameshwara too hinted at prosecuting former Yediyurappa and others based on the report. He too said the state cabinet will decide the next course of action.
"It has been said (in the report) that in this (PPE kit) purchase alone there was a loss of almost Rs 15 - Rs 16 crore. Naturally, the government will take the next steps. The cabinet will decide on it," Parameshwara told reporters.
Meanwhile, Karnataka Information Technology Minister Priyank Kharge alleged that the PPE kits that were locally available at Rs 333.40 apiece during the COVID-19 pandemic were purchased from a Chinese firm and a Hong Kong firm at Rs 2,100 per kit.
Addressing reporters, Kharge said that on March 17, 2020 the then BJP government in Karnataka approved the purchase of drugs, chemicals, medical equipment, and consumables for Rs 416.48 crore.
The Need Assessment Committee of the health department had decided to purchase 12 lakh PPE kits. This was at a time when 18 lakh kits were available in the state, he explained.
To purchase 12 lakh PPE kits, a rate of Rs 2,117.53 was fixed based on an email from the Commerce and Industry Department, the Minister said. He cited the email to state that there were names of two companies: a Chinese one and a Hong Kong firm.
The government did not negotiate with the vendor, did not invite tender nor did verify the prevailing market rate but whatever rate the vendor had proposed was agreed upon, the Minister alleged.
He added that the officials told Yediyurappa and the then Health Minister that three quotations had come and asked them to call for a short-term tender.
"But the Chief Minister and Health Minister termed that to be an emergency situation and asked the officials to prepare the files and they would look into them," Kharge alleged.
On April 2, 2020, the file was submitted to the government. The CM gave a direct order to purchase one lakh PPE kits and this cost the government approximately Rs 21.18 crore, he said. In all, the PPE kits were purchased for a total cost of Rs 62.57 crore.
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Rs 30,000 cr loss a month: Oil companies bleed as fuel prices on hold amid global energy spike
New Delhi (PTI): About Rs 700-1,000 crore loss per day. Rs 30,000 crore every month. India's state oil companies are quietly absorbing a massive financial hit to keep petrol, diesel and LPG prices unchanged even as global energy markets face a turmoil that is bigger than all previous crises combined.
While countries from Japan to United Kingdom have raised petrol and diesel prices by up to 30 per cent since the start of the West Asia conflict, fuel prices in India continue at two-year-old levels.
The war disrupted India's import of 40 per cent of crude oil (raw material for making petrol and diesel), 90 per cent cooking gas LPG and 65 per cent natural gas (used to generate electricity, make fertilizer, turned into CNG and piped to household kitchens for cooking), but state-owned oil companies have maintained uninterrupted fuel supplies with no rationing or shortage at any point in the last 10 weeks.
But this has come at a cost - Rs 30,000 crore under-recovery or loss every month for the three oil marketing companies - Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), two sources with direct knowledge of the matter said.
The under-recoveries - the gap between input costs and realised retail prices - rose sharply in March/April before tapering a bit. Daily under-recoveries during April were estimated at about Rs 18 per litre on petrol and Rs 25 per litre on diesel, translating into average losses of Rs 700-1,000 crore a day for OMCs, they said.
At a news briefing on developments in West Asia, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said prices in the international markets, on which India relies to meet 88 per cent of its oil needs, have been volatile and supplies impacted.
Crude oil prices which were around USD 70 per barrel two months ago, are now at USD 120, she said. "It has been government's endeavour to keep prices stable so far and that there is no price increase for consumers," she said. "This has hit finances of OMCs... monthly under-recoveries are of the order of Rs 30,000 crore."
She, however, refused to say if retail petrol and diesel prices will continue to hold.
"As I said, the endeavour so far has been to see that there is no price increase," she said.
The three oil marketing companies (OMCs) have worked overtime to keep the supply lines running even when demand spiked due to panic buying.
The government intervention included excise duty reductions and absorption of part of the fuel cost burden. The special additional excise duty on petrol was cut to Rs 3 per litre from Rs 13, while excise duty on diesel was reduced to zero from Rs 10 per litre.
The under-recoveries would have swelled to nearly Rs 62,500 crore had the government not cut excise duty on petrol and diesel by Rs 10 per litre each.
The government, Sharma said, has taken a hit of Rs 14,000 crore a month in cutting the excise duty.
The Centre's effective absorption at peak crude prices was estimated at around Rs 24 per litre for petrol and Rs 30 per litre for diesel.
The February 28 strikes by the United States and Israel on Iran triggered a sharp escalation in West Asia tensions. Energy prices surged as the conflict widened and shipping risks intensified in the Strait of Hormuz - the shipping lane through which India and other countries imported crude oil, LPG and natural gas from Gulf countries. Tanker movement was disrupted.
The companies also faced additional costs from emergency crude sourcing, higher freight charges due to vessel diversions, elevated marine insurance premiums and refinery optimisation expenses. Despite these pressures, fuel and LPG supplies remained uninterrupted across the country.
The surge in crude prices and the decision to shield consumers from higher retail prices placed significant strain on OMC balance sheets and refining margins, sources said.
They added that the measures reflected a policy decision to prioritise consumer stability and economic continuity during a global energy shock.
Sources warned that a prolonged period of elevated crude prices could lead to higher working capital borrowings and force some recalibration of capital expenditure plans. However, investments linked to refining expansion, energy security infrastructure, ethanol blending, biofuels and transition fuels would continue with government backing, they said.
India's approach contrasted with measures adopted by several other economies, where fuel prices rose sharply after the conflict-driven energy shock.
Petrol prices increased by about 34 per cent in Spain, 30 per cent in Japan, Italy and Israel, 27 per cent in Germany and 22 per cent in the United Kingdom, according to estimates. Several countries also introduced rationing, conservation advisories, emergency relief packages or fuel caps.
In India, petrol prices remained Rs 94.77 per litre and diesel at Rs 87.67, with no rationing, mobility restrictions or supply disruptions, they added.
Sharma said the revenues that OMCs earn are used to buy crude oil, build infrastructure to process it into fuel and create channels that will take the fuel to consumers.
Their capex spending is all dependent on the revenues they earn, she added.
