The Hindu Business Line : Pricing the poor man's fuel

Undeniably, kerosene is a poor man's fuel and must not be burdened with hike in its price. But is the poor man able to get this product at the controlled price? Try buying kerosene, and the quote may be Rs 30 a litre. Ask those who buy the fuel on ration card, and this is what you are likely to hear: The ration shopkeeper would oftentimes say that stock is over and that he has bought kerosene from open market that he would sell at Rs 25 a litre. So, even ration card buyers most times pay the black market price.

Does the Government or an oil company check if the poor are getting the product allocated for them? The stock answer will be that the distribution is in the hands of the State government. It is estimated that less than half of the current kerosene consumption is the real demand of the poorer section. The rest is used for adulteration and profitably too. With kerosene price not raised, the profitability of the admixture gets better.

Many years ago I suggested that kerosene be sold to the poorer sections in sachets. The then Chief Controller of Explosives was prepared to go through the arduous process of changing the rule book on safety of kerosene. But the papers did not move far. This will bring down fuel adulteration and save engines from damage, reduce pollution, and save subsidy for the oil producers, refiners and marketers as also the Government. As for LPG, it certainly is not a poor man's fuel, but continues to be subsidised. This gas was initially subsidised so that it became the cooking fuel of choice. But, today, more than the housewife it is the taxi driver who is the main beneficiary as he uses this gas as an alternative to petrol.

Surely, all this is well known to the government, though it still persists with old ways. Can there be some "thinking out of the box"?

(The author is a former Director — Marketing — IBP Company Limited. He can be contacted at vijurags@gmail.com)

S. Raghavan

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