38.6 % of PDS Kerosene diverts to unscrupulous elements

National Council of Applied Economic Research (NCAER) in its report has estimated the total leakage/diversion of kerosene meant for distribution under public distribution system (PDS) as 38.6 per cent. This was stated in the rajya sabha by the union minister of state for petroleum and natural gas Mr. RPN Singh. The minister was replying the questions raised by the member Mr. Parimal Nathwani.

The possibility of the diversion of petroleum product like PDS Kerosene by some unscrupulous elements to derive monetary benefit cannot be ruled out due to huge price difference between PDS Kerosene and petrol/diesel as well as for non-PDS kerosene, the minister admitted.

Mr. Nathwani wanted to know the annual supply of kerosene for sale through ration shops for supply to the poor, pilferage and sale of the same in black market by organized mafia and mechanism to curb siphoning of kerosene to black market. Mr. Singh in his reply informed the house that the allocation of PDS kerosene was made by the central government on quarterly basis but its distribution within the States/UTs was the responsibility of the concerned State/UT Government. Kerosene being an ex-marketing installation product, its transportation from the depot to the retail sale point was the responsibility of the State Governments/UTs; he added.

The minister also said that the Government made an annual allocation of 1.12 corer kilo litres of PDS kerosene for the year 2010-2011 to State/UTs. In order to check the black marketing of PDS kerosene, the Central Government made provision binding the dealers in the Kerosene (Restriction on Use and Fixation of Ceiling Price) order-1993, issued under the Essential Commodities Act 1955, to sell PDS kerosene at a price fixed by the Government or OMCs and to prominently display stock-cum-price board at the place of business; including the place of store at a conspicuous place; the minister said and added that State Governments were empowered to take action against those indulging in black-marketing and other irregularities under the control order.

The minister further stated that the government had taken a number of initiatives like automation of retail outlets, third party certification of retail outlets, monitoring of movement of tanker-trucks through Global Positioning System (GPS) to check various irregularities/malpractices like adulteration, diversion etc of petroleum products. He said that public sector oil marketing
companies (OMCs) could also undertake regular and surprise inspection of retail outlets and take action under Marketing Discipline Guidelines (MDGs) and Dealership Agreement against those indulging in adulteration and malpractices.

MDGs provide for termination of dealership in the first instance itself for serious malpractices like adulteration, tampering of seal and unauthorized fittings/gears in dispensing units; he added.

With a view to assessing the genuine demand requirement of kerosene in different States/UTs, the Government had commissioned in December 2004 a comprehensive study of the subject through the NCAER.