A Bofors a day

BS OPINION

While the country's probably spent record amounts of newsprint covering every detail of the Rs 64 crore Bofors payoff, there's a Bofors happening every week in the oil sector, without a stink being raised by anyone.

As Business Standard reported yesterday, as much as 40 per cent of the kerosene supplied at subsidised rates through the ration shops finds its way into the open market and is adulterated with diesel; and the loss to the government runs to Rs 3,000 crore a year in lost taxes (excise and sales tax on diesel are significantly higher than on kerosene) and the extra subsidy on kerosene that does not go to the target lot.

While the economy has been growing at 5 per cent per year, recorded sales of diesel have actually fallen by 4 per cent each year. Clearly, much more diesel is being adulterated than before. By one estimate, the adulteration has gone up from 30 per cent to 50 per cent.

The customer knows. Last year, while industry sales grew by around 3.5 per cent, petrol sales in 300 BPCL's Pure-for-Sure outlets (which promise unadulterated petrol) in north India grew by a whopping 25 per cent.

The other oil companies now make the same promise, but adulteration remains rampant. Yet the ministry of petroleum refuses to take action, despite repeated complaints from the oil marketing firms. On occasion, these firms have furnished details of outlets in Gujarat that openly sell kerosene to truckers, but to no purpose.

Gujarat, in fact, is one of the worst offenders "" in the first quarter of this year, recorded consumption of diesel in western states like Gujarat fell 5.5 per cent while it rose by 4 per cent in the north, despite the fact that Delhi moved its entire public transport fleet to CNG.

But far from taking any action, the oil companies tell stories of being forced, on the instructions of the ministry, to reinstate dealers whose franchises had been cancelled for selling adulterated fuel.

While the government refuses to raise kerosene prices (it is the huge price differential between the two that is the reason for the adulteration), India's neighbours Pakistan and Bangladesh have done just this "" and it can be no one's case that Bangladesh has a lower poverty ratio than India does.

In any case, the whole point is that it isn't the poor who are getting the subsidised kerosene.