The Hindu Business Line : Kerosene through PDS — Plan panel expresses concern over proposed mechanism

THE Planning Commission has expressed reservations on the mechanism being worked out by the Petroleum and Panchayati Raj Ministries for strengthening the distribution and marketing of kerosene under the public distribution system (PDS).

Sources in the Planning Commission said that certain doubts have arisen on whether the concept of depot system would be successful in taking the product to the entitled beneficiaries.

Besides, the Commission is understood to be not in favour of involving the Navratna oil companies in the whole process.

The Commission is examining other options for distribution network, which includes a coupon system.

The Petroleum Ministry, on its part, has been expressing concern on the success of coupon system, fearing counterfeit coupons.

While the Planning Commission and Petroleum Ministry are working out a foolproof PDS network, the latter is in consultation with the noted film-maker, Shyam Benegal, for an awareness campaign so that the people of the targeted blocks where the scheme is to be initially introduced take their entitled quota.

The campaign expenditure is still being worked out, Petroleum Ministry sources said. Most of the campaign will be through regional press and DD channels. The campaign will also speak about the grievance redressal system.

The Government has deferred the launch of the pilot scheme to strengthen the distribution and marketing of kerosene under PDS to October 2. The launch was earlier scheduled for the first fortnight of August.

The scheme aims to ensure that the subsidised product is made available to the intended consumers and not diverted for unauthorised applications.

A pilot project has been approved by the Government to strengthen the distribution network of PDS kerosene in 10 per cent of the blocks.

Under the scheme, oil marketing companies (OMCs) will use technology to transport kerosene to the actual storage point. The scheme will also involve the panchayats to ensure that those targeted benefit from it.

The Government provides a subsidy of more than Rs 13 per litre on the sale of PDS kerosene.

Because of the wide difference in market and PDS prices, the intended beneficiaries have not been getting their supplies.

The state-owned OMCs will initially create infrastructure facilities on a pilot basis in 10 per cent of the blocks in the country.

Based on the experience of the scheme for six months, scaling it up to cover the entire country will be considered.

The revamped PDS kerosene scheme will cost the OMCs Rs 500 crore.

Deliveries up to wholesale and sub-wholesale points will be under the Government OMCs to prevent kerosene diversion. Currently, there are no dealerships in more than half of the blocks in the country.

The Petroleum Ministry has already commissioned a study through the National Council for Applied and Economic Research (NCAER) to assess the genuine demand and requirement of kerosene.

Further action to strengthen and streamline PDS kerosene supply will be taken on receipt of the NCAER's final report, which is expected in September.

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