Subsidized Kerosene root cause for Corruption & Crime

Subsidy to Kerosene

 

The unsustainable subsidy to Kerosene is being continued by successive Governments at the Center, justifying that it is primarily required to protect the poor consumers, particularly in rural areas, so that they may afford for lighting and clean cooking fuel.

 

 It is reported that only 1.3% of rural households use kerosene for cooking and even the percentage of households using Kerosene for lighting must have gone down drastically, as BPL households are being connected to power grid under RGGVY programme. The recurring subsidy burden on Kerosene for lighting purposes, can altogether be eliminated, by supplying stand alone solar powered LED Lanterns with Lithium Ion batteries with long life span, for un electrified rural households through MNRE.

 

Thriving Black Market in Kerosene

 

 It is a well known fact that large scale diversion of subsidized kerosene has been taking place through out the country all these years because of large price difference between PDS Kerosene. and Diesel / other fuels. The interim report of NCAER in 2005-06 had put the estimated annual value of the black-market at Rs 10, 000 Crores. Around the same time NIPFP is reported to have said that Kerosene and cooking gas subsidies benefit Semi-urban &Urban communities more, respectively, rather than the Rural Poor. 

                                             

Assuming that about 40% of 9 to 10 million tons PDS Kerosene being supplied annually is flowing into illegal trade, it works out to be almost 4 million tons or 5200,000,000 Ltrs in the parallel market. At around Rs 30 per Ltr in the open market, this black market trade is worth Rs 15, 600 Crores annually.

 

Mafia Vs Rule of Law

 

Be it Oil Mafia, Real-estate Mafia, Drug mafia, Liquor mafia, Mining mafia, Corporate mafia etc,   they always have the final say, because they have the easy access to the Policy and Decision Makers to manipulate the regulating and law enforcing agencies to their advantage. As long as these mafias can thrive, there is no way to cracking down or crushing them, in the present state of affairs, with poor regulatory systems and lack of good-governance

 

Conclusion

 

The only way to eradicate this evil is to eliminate the root cause, for survival of Oil mafia, namely the removal of unsustainable subsidy to Kerosene, which gives it undue price advantage against other fuels. It is nearly one year, since the Expert Group submitted its report on "Pricing of Petroleum Products" recommending the rise in PDS price of Kerosene to Rs 15 per Ltr and revise every year there after.

 

This needs to be acted upon immediately, if not scrapping the subsidy altogether, which is the breeding ground for the Oil Mafia. Otherwise, we will be playing with the lives of many more honest and committed officers like Yeshwant Sonawane, Additional. District Collector, of Maharashtra State. 

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