Aiyar: Clean-up act

New Delhi, July 8: Petroleum minister Mani Shankar Aiyar today extended the deadline to introduce the improved public distribution scheme for kerosene to October 2 from August 15.

The public sector oil firms wanted more time to implement the scheme as they have to construct tanks in remote areas and arrange for special barrels and tankers for distribution.

The improved scheme, which was to be introduced as a pilot project in 10 per cent of the country's development blocks from August 15, will now be inaugurated on Mahatma Gandhi’s birthday.

The scheme will ensure that subsidised kerosene reaches the poor households and is not diverted to adulterate diesel.

The pilot project will be implemented for six months after which the scheme will be independently assessed. Based on the experience gained, it would be expanded to cover the entire country.

According to a survey of the National Council for Applied Economic Research (NCAER), as much as 50 per cent of the kerosene being provided by the oil companies at a subsidised rate for the public distribution system (PDS) is being illegally diverted to adulterate diesel.

While the oil firms are losing over Rs 11 per litre on PDS kerosene, unscrupulous elements are raking in a fast buck as there is an over Rs 20-per-litre difference between the prices of kerosene and diesel.

Under the new scheme, Indian Oil, Bharat Petroleum and Hindustan Petroleum will set up at least one kerosene dealership in each development block. At present, less than half the blocks are covered and there is excessive concentration in the urban areas. At least five to 10 ‘sub-wholesale’ points will be present in each block.

A dedicated fleet of clearly marked tanker-trucks will be used to transport the kerosene to distribution outlets to ensure transparency.

Under the existing system, the wholesaler at the state level picks up the kerosene from the companies and is expected to supply it directly to the retail points. But since the person is not closely monitored, a large-scale diversion takes place.

The Oil Industry Development Board will provide funds to the marketing companies for setting up modern storage tanks with a minimum capacity of 20,000 litres.

Electronically metered dispensing pumps will be installed and an adequate number of barrels with a special logo will be provided for delivery to the sub-wholesale points. Supplies to these points will be made under the direct supervision of the oil companies.

The distribution of kerosene at fair price shops will be made more transparent.