Government is set to dump Jan Kerosene Pariyojana after the ambitious scheme launched by the former Petroleum Minister Mani Shankar Aiyar flopped with states and resulted in an annual loss of Rs 200 crore.
Jan Kerosene Pariyojana (JKP) scheme was launched on October 2, 2005, with an objective to effectively distribute kerosene to end consumers and prevent diversion of the fuel.
It also sought to involve Panchayati Raj institutions in monitoring of the scheme.
However, Gujarat, Maharashtra, Rajasthan and Goa withdrew from JKP in 2006 and 2007 and most of the others too were not enthused about the scheme, a top oil ministry official said.
"The scheme has not met its end objective of preventing diversion. Instead, it has resulted in a Rs 200-crore loss. We cannot continue like this," he said.
JKP involved creation of 5-10 sub-wholesale points in each block for a three-tier distribution system - wholesaler, sub-wholesaler and retailer. However, states preferred retailers getting their supplies directly from the wholesaler.
The scheme also envisaged involving local panchayats to streamline supply through public distribution system (PDS).
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"Launches are done with much fan-fare but no noise is made when a scheme is closed," he said, indicating that JKP would be buried without any formal announcement.
According a study of NCAER, improved targeting of PDS kerosene led to a benefit of Rs 0.33 per litre, while the cost of implementing the scheme came to Rs 0.46 a litre.
"Clearly, the benefits were short of cost involved," he said.
The number of blocks covered by JKP in Gujarat when the scheme was operational stood at 24, while for Rajasthan it was 13. In Maharashtra 30 blocks were covered, while Goa had only one block.