Retail price of auto fuels

Apropos ‘Falling crude: Stable retail fuel prices the only lifeline for OMCs’ (March 22), the reported decline by over 13 per cent to about $74 a barrel in Brent Crude since the beginning of March this year might have come as music to the ears of the five state-owned OMCs as also to the government. Such a favourable situation would culminate in easing of its burden by way of lower spending on crude imports and its depleting foreign exchange reserves as India imports over 88 per cent of its crude oil requirement. The recent decline is largely be attributed to the financial crisis spurred by the Silicon Valley Bank collapse and trouble at Credit Suisse and First Republic Bank, among others, thereby dampening the energy outlook globally. The latest declining trend in global Brent Crude may be viewed as a ‘blessing in disguise’ for various stakeholders. The end-users of auto fuels, however, who continue to reel under ‘stage-managed’ prices.

SK Gupta

New Delhi

Disruptions in Parliament

With reference to ‘Unparliamentary methods’ (March 22), the prolonged disruptions in parliamentary proceedings due to logjams between government and the Opposition is unfortunate, leaving the citizens of the country in a hapless condition, waiting for important Bills to be passed. Ultimately, what cannot be resolved by the legislature can be remedied either by the executive or judiciary. In the entire process, the colossal loss to national exchequer cannot be ignored.

Sitaram Popuri


Pass the Bills

The impasse created by the ruling and Opposition political parties in Parliament on issues which can be deferred to a later date has expended the valuable time of the Houses sans any gains. Rather than discussing and disposing of the critical Bills, the exchequer’s funds have been spent without value additions. As the Bills are for executing policies and reforms in a time-bound manner, their discussion and disposal are more significant than any other issue.

As the financial year will be coming to an end soon, the MPs need to utilise their time and energy for discussing Bills that are pivotal to the growth and welfare of the people.

VSK Pillai

Changanacherry, Kerala

Bank failures

This has reference to ‘Lessons from global banking crisis’ (March 22). A rash of failed banks in the West is but a symptom. The virus of capital-induced growth had long permeated the neo-modern global financial framework, to unleash insatiable demand for credit.

Nineteenth century bankers matched the value of their deposits with their own capital even up to a 50/50 basis, towards cushion. There was no concept of a limited liability then, which made them cautious lenders. That system was abandoned during the Industrial Revolution that came with enormous demand for credit. Today, this equity buffer is almost nothing.

Banks as limited companies now, have separation of ownership and control. Ownership is widely dispersed in shareholders and risks capped by limited liability, enabling banks to assume far greater risk even as they take on more liabilities to boost returns.

If the past decade saw the failure of highly-leveraged financial institutions holding weak assets in toxic mortgages and derivatives, respectable government bonds have wrought havoc today. No amount of regulation can help seminally flawed banking architecture.

R Narayanan

Navi Mumbai