Kerosene subsidy to the tune of 38.6% diverted for black marketing
New Delhi, Aug 2 (UNI) Out of the total Rs 15,000 crore government kerosene subsidy, 38.6 per cent of it at Rs 5,700 crore meant for the targeted group through PDS disbursement for the current fiscal, is being totally diverted for black marketing and adulteration purposes.
The kerosene subsidy burden that falls on the government at the current prices for 2006-07, is estimated at Rs 15,000 crore, of which 38.6 per cent is being diverted for black marketing purposes, an Associated Chambers of Commerce and Industry (ASSOCHAM) paper on 'Need for Urgent Adjustment of Prices and Taxes on Petroleum Products,' said today.
Of the 38.6 per cent that is totally diverted for ulterior gains by PDS owners throughout the country, the share of non-household use is estimated at 18.1 per cent, black market 17.9 per cent, while those of non-card holders 2.6 per cent, the study says.
The Rangarajan Committee which recently submitted its report to the government, estimates LPG subsidy burden on government at Rs 11,000 crore and that of kerosene at Rs 15,000 crore.
The central government, particularly the Ministries of Finance, Petroleum and Natural Gas, Civil Supplies and Consumer Affairs, should collectively take measures to ensure that the targeted subsidy reach the intended group, ASSOCHAM President Anil K Agarwal said.
He added that in the absence of corrective measures, the black marketers would be causing the government kitty a net loss of Rs 5,700 crore on account of kerosene subsidies extension.
The ASSOCHAM Study also shows that Kerosene use has taken an altogether new dimension as there has been a change in the usage of Kerosene in the last 35 years. In the early 1970s, Kerosene consumption was 32.8 lakh tonne which rose to 94 lakh tonne in 2005-06, up 2.86 times.
In the same period, however, LPG use has increased 60 times from 1.7 lakh tonne to 102 lakh tonnes. With the increased use of LPG, the use of Kerosene should have come down but statistics show otherwise, says the study.
The study further points out that in state of J&K, Himachal Pradesh and Rajasthan, the increase of LPG consumption has been around 60 times whereas it has risen 15 times in Delhi, Gujarat and Maharashtra. Karnataka, West Bengal and Orissa have seen an increase of 30 times in LPG consumption.
While, the increased use of LPG has led to its higher production and imports, kerosene production has declined to 9 per cent in 2003-04, 2004-05 and its imports also declined by 10.27 per cent.
It is estimated that 30 per cent of PDS kerosene was diverted for black marketing and adulteration in 1994. The same figure has now been revised to 38.6 per cent, an increase of 28.6 per cent in 11 years.
In terms of monetary figures, diversion of kerosene is estimated to be worth over Rs 10,000 crore annually, supplied through PDS for adulteration of petroleum products. Kerosene imports nearly doubled to 6,65,000 tonnes in the first seven months of 2003-04 as opposed to 3,96,000 tonnes in the previous year.
The Chamber has recommended that there should be a check on the flow of the kerosene, by introducing IT systems to monitor the movement of trucks carrying the kerosene and monitoring the fuel tanks, as suggested by the Rangarajan Committee report.
It has further suggested that there should be a check on adulteration on the methods suggested in the Rangarajan Committee and added that distribution of kerosene should be minutely monitored.
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