Earlier this week the publication of a new study suggested that the British public is experiencing much greater financial pressure than the government figures indicate.

According to statistics released by the Motley Fool, some nine out of ten consumers believe that the cost of living is rising by 7.3 per cent - about three times higher than the official number of 2.5 per cent. Overall, two out of three believe their personal inflation lies between four and nine per cent, with one in five people claiming is stands between ten and 15 per cent.

Meanwhile, those in Scotland suggested that inflation currently stands at 6.3 per cent - a fall from the 7.5 per cent noted in January. On the other hand, Northern Ireland consumers could be facing a particular increase in difficulties with their day-to-day finances as they claim to face an inflation rate of 8.1 per cent - the highest figure noted in the country and up by 0.4 percentage points from six months ago.

David Kuo, head of personal finance for the firm, said: “Older people, especially those who rely on retirement income, are some of the worst affected. Furthermore, people relying on the basic state pension, which will only rise in line with government inflation figures, may feel the pinch even more. Inflation is sometimes called the hidden risk because it quietly chips away at the buying power of the pound in our pockets. But it’s hard to disguise a chip when it becomes a chunk.”

Consequently he suggested that inflation is not “whittling away” consumers’ income as official figures suggest but rather is leading towards a significant rise in debt problems. “For one in five people, the buying power of the pound in their pockets is being eroded at over twice this rate,” Mr Kuo claimed.

Consumers aged 58 and over claimed inflation rates currently stand at 7.1 per cent, which could see these people particularly facing debt problems. Meanwhile, those between 42 and 49-years-old claimed the highest rises in living costs at 7.6 per cent. However, although young people were said to have been the least affected, they claimed living costs had risen to 6.9 per cent a rise of a full percentage point since January.

But, in a challenge to the Motley Fool figures, research from Birmingham Midshires’ Life 2 campaign has indicated that those over the age of 55 see themselves are being financially comfortable. Some 19 per cent of those in the group claim they can afford the social life they want, with one in ten reported to be “totally satisfied” they can afford to indulge themselves.

However, only one in 50 of 18 to 24-year-olds were said to hold this level of satisfaction. The study from the financial services firm also indicated that just over half (55 per cent) of consumers aged above 55 with both a state and personal pension account say that they are confident that they can afford day-to-day expenses in later life, the largest proportion recorded among any working group. Meanwhile, this figure was said to have fallen to 15 per cent for Britons with just a state pension.

Jason Robinson, director of savings operations for Birmingham Midshires said: “The over - 55s are facing enormous change in their lives and many may be apprehensive about their retirement.”The director added: “It’s great news that many people can look forward to financial and social freedom in later life - but, of course, the more money they have coming in from pensions and savings the more enjoyable retirement will be.”

However, with inflation rates higher than officials figures and the government announcing yesterday that interest rates are rise to 5.75 per cent consumers of all ages could find their day-to-day finances squeezed.

The second term of the UPA government is burdened from the high expectations of oil marketing companies, since the oil sector reforms are said to be a top agenda for the Dr Manmohan Singh led government. News report suggests that the government would be initiating strong measures to introduce reforms in the pricing of petroleum products. After the successful first term (tenure) in the petroleum ministry, Petroleum Minister, Murli Deora, has set forth 6-8 weeks for possible action on the various issues facing the oil sector.

Industry observer feels that in spite of the various positive feelers, it remains to be seen whether the reforms are a substitute arrangement for the long impending structural problem of oil subsidies in the country or prove to be a change in move for the sector. However, given the current unplanned nature of subsidy-sharing, it would be interesting to ascertain who are likely to be the key beneficiaries of the proposed reforms i.e. whether it will lead to improvement in the earnings of the Oil Marketing Companies (OMCs) or upstream segment or government finances?

De-regulation of Retail prices - How long will it work?

A senior official from Bharat Petroleum Corporation Ltd said that this is not the first attempt by the government to de-regulate petroleum product prices. In April 2002, in an attempt to phase out subsidy on petroleum products, the government dismantled the administered pricing mechanism (APM) paving the way for free pricing mechanism for petrol and diesel, while prices of kerosene and LPG were still kept under the Regulator’s purview.”

During 2002, the government gave limited freedom to the OMCs to revise retail prices within a band of +/-10% of the mean of rolling average of the last 12 months and the last 3 months international cost and freight prices. In case of violation of the band, the matter had to be taken up with the Ministry of Finance for modulation in Excise duty rates. “Oil companies were given some freedom to determine the prices based on the international petroleum market. However, the euphoria of dismantling was short-lived,” said an official from state-owned oil corporation.

He said, “When the crude prices began to increase in 2004 and oil companies wanted to pass on the same, but the government interference halted the free pricing of petrol and diesel.” Thus, the past record of implementation of the pricing reforms has not been very impressive.

Pre-requisites for successful implementation of price de-regulation

Successful implementation of de-regulation of subsidized products hinges on following factors:

Stability in crude prices:

Stability in crude prices is a prime requirement for successful implementation of price de-regulation, a technical analyst foresees. However, historical evidence as well as current news reports indicates that price de-regulation will be allowed with certain price bands. So, in the current scenario of volatile crude and product prices, successful continuation of the any possible price deregulation might not be easy.

It may be noted here that post the sharp correction in crude oil prices from US $147 per barrel (bbl) to a low of around US $32 per barrel last year, it has once again bounced back significantly and currently hovering in excess of US $65 per barrel. “Volatility in crude prices is still not behind us, and the government might follow the wait and watch policy before taking a stand over price de-regulation,” he said.

Angel Broking, a domestic broking firm, believe that the crude oil prices are likely to average at US $55/bbl and US $60/bbl in the current and next financial year, which is lower than the estimated cap of US $75/bbl for the free pricing of products. This in turn provides an ideal scenario for de-regulation of the subsidized petroleum product prices.

Stable and lower product cracks of subsidised products:

If recalled, the last fiscal proved to be a nightmare for the OMCs due to substantially higher under-recoveries. Increase in the crude oil price has been the spoil sport. However, it may be recalled that in the past prices of key subsidised products, viz. diesel and kerosene had significantly appreciated higher than their historical levels due to substantially higher product cracks. The increase, which generally tends to be in the range of US $10-12/bbl shot up significantly and added fuel to fire.

However, on account of the ongoing global slowdown, the cracks of diesel and kerosene have declined substantially and are likely to remain under pressure going forward on account of addition of significant refining capacity. “If the cracks remain subdued in line with our expectations, it would result in lower refining profitability for the OMCs. Thus, cracks prove to be a double-whammy as on the one hand while it hurts the marketing operations when they are high and boosts refining, on the other, when they are low it boosts profitability of the marketing operations and dents the refining profitability,” said an official from another state owned oil corporation.

Stable and reform-oriented government:

Industry analysts observe that successful implementation of the pricing reforms requires stable and reform-oriented government. Fortunately, this time around, it seems to be in place. “However, in spite of being a stable government, the UPA is a coalition government with the DMK and TMC as its key allies. With both Tamil Nadu and West Bengal likely to hold Assembly elections in 2011, we believe that the Congress will find it tough to persuade its key allies for the pricing reforms,” said industry analysts.

Moreover, with elections likely to take place in some state or the other every year, complete de-regulation without the price bands is quite unlikely. Moreover, full de-regulation of the subsidized product prices goes against the image of the Congress, as a representative of the “Aam - Aadmi”.

“We do not rule out the possibility of partial price decontrol of transport fuels, but we still continue to believe that partial decontrol within the bands is unlikely to provide solution to the long impending structural problem of under-recoveries for the Indian OMCs as the underlying variables involved in the price determination are volatile in nature,” a source from Ministry of Petroleum and Natural Gas said.

The subsidy burden (without considering the case for de-regulation) for FY2010 and FY2011 is to result in under-recoveries of Rs 15,182 crore and Rs 39,140 crore, respectively. In terms of composition, FY2010 subsidy constitutes only cooking fuel, while in FY2011 almost 3/4th of the subsidy would comprise cooking fuels. Thus, subsidy on auto fuel does not form a major chunk of the overall subsidy burden for companies even if it exists. Thus, possible de-regulation would not lead to material reduction in the overall subsidy burden for the Sector.

Subsidy-sharing structure holds the key

A officer from state owned oil company said, “We believe that possible de-regulation will certainly have some effect on the position of under-recoveries going ahead. However, the possible beneficiary of price de-regulation still needs to be ascertained.” The likely beneficiaries of possible price de-regulation are expected to be determined on the basis of the subsidy-sharing structure between the various stakeholders, viz. the government (via oil bonds), upstream companies (viz. discount on crude and products sold) and the OMCs.

Historically, the trend in sharing of subsidy burden seems to be missing with the subsidy between various parties shared in an ad-hoc manner. For instance, the share of OMCs has fluctuated between 0 - 71%.

The sharing structure of the last fiscal was seen as an exception wherein the government and upstream companies took the burden of the subsidy as the OMCs were unable to share the load on account of huge inventory losses and weak refining fundamentals. Thus, we believe that the OMCs will continue to share the burden on subsidized products. Overall, in spite of the ad-hoc subsidy sharing structure, one can gauge the government’s intent to keep the OMCs profitable to maintain their credit rating and normal functioning.

Given the fact that losses on cooking fuel are likely to remain high on account of non-revision in their prices, as mentioned earlier, the resultant under-recovery on the account of this is likely to be high for the OMCs. Thus, earnings of the OMCs will continue to be highly dependent on receipts from the government by way of oil bonds and upstream discounts. Thus, in spite of all the hype over de-regulation of the auto fuel prices, earnings visibility for the OMCs remains low.

We believe that with things unlikely to change in the coming years, oil bonds and upstream discounts would continue to remain critical for the OMCs due to the large losses in the cooking fuel segment and thus, re-rating of these stocks fundamentally appears low. Nonetheless, though it is easier to believe that the Upstream Segment is likely share around 33% of the gross under-recoveries, predicting the extent of oil bonds is tricky.

The government is likely to be the key beneficiary on the account of de-regulation of the subsidized auto fuel prices. The government could retain the benefits of the pricing reforms by lower issuance of oil bonds to the OMCs in FY2010 and FY2011, especially considering the problems it faces on the fiscal deficit front. “Thus, in spite of the partial pricing reforms, we expect neither the earnings nor the visibility associated with it likely to improve for the OMCs,” said a brokerage firm.

However, the pricing reforms will improve the cash flows of the OMCs, to an extent, as earnings will be substituted with cash profits instead of oil bonds. In a non-deregulated scenario, industry observers 33% subsidy sharing mechanism by upstream, 50% by government and the rest (17%) by OMCs for sharing under-recoveries for FY2010 and FY2011. For FY2010, if the partial de-regulation were to take place and the government reduces the proportion of oil bonds to 50% or less with the upstream companies maintain their share of 33% of gross under- recovery, the OMCs would earn lower profits than in case of non-de-regulation scenario. Similarly, for FY2011, if the oil bonds were to be issued to the tune of around 44% or lower, profits would be lower than in case of non-de-regulated scenario.

Thus, the extent of the oil bonds issued will determine the fate of the OMCs going ahead.

If you take a look at Fox News 59’s report on the increasing number of fake Hoodia Gordonii supplements on the market, we think you’ll agree with us when we say whilst they are accurate in their assumptions, their story is still vague.

On the one hand, they make the incredibly valid point of: how are we to tell if we are receiving genuine Hoodia Gordonii when the company who owns the patent for it has not even released their own product. It is a point that paints a very different picture of the Hoodia market.

Yet despite their accuracy, their general vagueness on how to look out for real products is not enough to give consumers a real helping hand.

Let us explain.

In overview of Fox News 59 report, they highlighted 3 key features to look for: country of origin (if its not from South Africa it is not genuine), 100% Hoodia Gordonii and price.

And admittedly their overview of these 3 points was helpful, but to ensure that you are receiving real genuine, unaltered Hoodia Gordonii, there are other points that you really need to look out for:

CITES Certificate: this documentation will give you proof of where your Hoodia Gordonii supplement has been exported from. If it says it was exported from South Africa then it is more than likely real Hoodia Gordonii.

Ingredients: now whilst Fox News 59 was right that your supplement should only contain 100% Hoodia Gordonii. There is more to this story than seeing these 3 simple words. It is also important that you check that only the core of the plant has been used, as it is here where active ingredient P57 is found. Then you also need to be aware of the capsules ingredients. If for example you see the ingredients gelatine, magnesium stearate and stearic acid, then these don’t essentially mean the supplement is false. They are just the capsules ingredients.

Medical Backing: one sure way to make sure you are receiving genuine Hoodia Gordonii is the check where it was laboratory tested. If it was done by Alkemist Pharmaceuticals, and their website has got the documentation to prove it, then they are the real deal.

Price: real Hoodia Gordonii is rare. In fact it is considered to be an endangered species which is why it is so hard to export. And the cost to export this rare plant is expensive. So as you can see, if it costs a lot to export, manufacturers are not going to sell it to you cheaply. They want to make a profit from their product.

So what are you to take from the Fox News 59 Report? Well it’s most important point – that the weight loss supplement market is becoming flooded with Hoodia products that are all claiming to be the real deal but that can provide no proof that they are.

Take their other point about dietary supplements. Unregulated or quality controlled, companies who claim to be dietary supplements can essentially sell you anything. And we mean anything.

This is why it is so important to know what to look out for in order to increase your chances of receiving genuine, unaltered Hoodia Gordonii. Know what to look out for and you can begin experiencing natural healthy weight loss in no time.

Take appetite suppressant product UniqueHoodia. Medically backed by Alkemist Pharmaceuticals and CGMP, they have the CITES certificate, testing and documentation to prove they are the real deal:

• 100% pure, unaltered Hoodia Gordonii
• Calorie reductions of 2,000 calories a day
• 10,000 times more productive at reducing your appetite than glucose

Consumer Debt Relief Program

There is a great interest these days in the ways and means of debt relief and what sorts of consumer debt relief programs are available. This is understandable as a great many U.S. consumers are struggling with debt, credit card debt in particular. It’s one thing to be hit hard in the wallet when you have a job. It’s another different scenario entirely when a consumer is being harassed by bill collectors and is at the same time out of job and in the midst of a job search.

Credit Card Debt

Yes, it can be a real drag to have been laid off from your job and wake up to collection calls. Many good hard-working people through no fault of their suddenly and without warning find themselves in this position. Credit card debt can be a big enough issue when one has a job, but it is amplified to the max when a person finds themselves unable to make their credit card payments because they are out of work.

What is a consumer to do? Where to they turn for help? IS there help? The good news to all of this is yes - there is in fact debt management help available. But the debt management goes beyond simple management. There are debt reduction and debt elimination programs available to you, me, and anyone who is struggling with credit card debt. These consumer debt relief programs save people time, money, wasted efforts, and they provide consumers with peace of mind and place their financial lives back on track.

Chief among these programs is Debt Settlement. This program provides maximum benefit and the quickest results. Maximum benefits meaning debt reductions of 50% - 75%, and quickest results meaning almost instantaneous. These are the benefits that are available with a consumer debt relief program.

Total Debt Relief offers consumers a free debt evaluation which they can take advantage of at their website: www.totaldebtrelief.net