The Hindu Business Line : Pvt oil retailers told to follow marker system

Private sector oil companies like Reliance Industries Ltd, Shell India Marketing Pvt Ltd and Essar Oil Ltd, that are into the business of marketing transportation fuels - petrol and diesel - have been asked by the Petroleum Ministry to introduce the marker system to eliminate adulteration.

To check adulteration in auto fuels and diversion of subsidised kerosene the Government had earlier advised the state-owned oil marketing companies (OMCs) to introduce markers in adulterants.

"We have now asked the private sector players also to adopt the system," a senior Petroleum Ministry official said.

Detecting adulteration

Public sector OMCs have commenced introduction of markers in kerosene on an all India basis with effect from October 1.

Under this system, used globally to prevent adulteration of transport fuels with kerosene, the marker (special permanent dye) turns pink when tested for adulteration. It would be mixed with kerosene.

If the blended kerosene were to be used as an adulterant in other fuel, it would be easily detected through a visual test procedure, using a special testing kit.

The system would help in eventually eliminating the menace of adulteration of transportation fuels along the supply chain.

The marker helps detect adulteration through a simple test at the petrol station itself. Currently, the field forces of OMCs are using marker detectors both during surprise and regular inspections and the results show that it is acting as a major deterrent.

The marker is being put in kerosene at all supply locations - depots and terminals.

Price difference

Of the estimated 10.5 million tonnes of kerosene consumed annually, the Government and the OMCs together currently provide a subsidy of around Rs 14-15 per litre of kerosene sold to below poverty line families.

Adulteration in auto fuel is essentially driven by the huge price difference between auto fuels like petrol and diesel and potential adulterants kerosene, naphtha and other industrial aromatic solvents.

A litre of kerosene costs Rs 9. In September 2005, an NCAER study had concluded that 38.6 per cent of PDS kerosene was being diverted for adulteration of petrol and diesel.

The dominant players in the retailing business are PSU marketing companies. As on October 1, there were 30,915 retail outlets in the country being operated by public sector oil companies and 1,818 outlets by the private sector, taking the total to 32,733. In the private sector Reliance Industries has over 1,300 retail outlets, Essar Oil has close to 1,000, Shell has about 20, and Reliance Petroleum, which has been granted authorisation to set up retail outlets is yet to open its account.

The private sector players, which had taken a major hit in sales due to price differential between the prices of PSU retail outlets and themselves, are now in the process of reactivation, with the narrowing of the gap. Besides, the dip in international crude prices has also helped, industry sources said.

Of the 32,733 retail outlets, the highest numbers of retail outlets are in Uttar Pradesh (3,966 retail outlets), followed by Maharashtra (3,101 outlets), Andhra Pradesh (2,785 outlets), and Tamil Nadu (2,744 outlets).

More Stories on : Retailing | Petroleum | Economic Offences

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
2006 — A fast-paced year for FMCGs

`Advertising by realtors takes a quantum jump'

Hatsun Agro, Boost tie up

Will it be a Landmark-Tesco tango in India?

Pvt oil retailers told to follow marker system

Tudor unveils X'treme batteries