Showing posts with label IOCL. Show all posts
Showing posts with label IOCL. Show all posts

Tuesday, February 8, 2011

A 10,000cr fuel black market killed Yeshwant Sonawane

New Delhi: A thriving black market in kerosene, estimated at Rs 10,000 crore a year, killed additional collector Yeshwant Sonawane. A litre of kerosene sold at ration shops is often costlier than a bottle of packaged water. Most of this ‘‘poor man’s fuel’’ is pilfered and sold in the black market for a price two-three times higher. 

Sonawane tried to meddle with this lucrative illegality and paid with his life. Actually, most enforcement officers make peace with the fuel mafia and get some crumbs from it. It would appear Sonawane didn’t. 
The oil ministry has tried to work out the maths of this black market. According to its estimates — said to be conservative — as much as 40% of kerosene supplied for the poor is siphoned by ‘‘organized gangs of mafia proportion’’. 

State-run oil companies annually supply 9-10 million tonne of the fuel for sale through ration shops; 40% of that means almost 4 million tonne — or about 5200,000,000 litres of kerosene — is flowing into the parallel market. At around Rs 31 per litre in the open market, this trade is worth Rs 16,120 crore. That’s why the official estimate (done in 2006) is said to be conservative. 

‘‘Even at government-capped price, the value of this diverted kerosene will be huge. Add the money made by selling it in the black market for more than twice the controlled price, and you will get a really large trade involving thousands of people,’’ said a senior marketing executive of IOC, the largest fuel retailer. 4-5 million kilolitres of kerosene is diverted every year 

An interim report by National Council of Applied Economic Research (NCAER) had in 2005-06 said nearly 4-5 million kilolitres of kerosene was being diverted every year. It had put the stakes at Rs 10,000 crore at the time when consumption levels were hovering a tad higher at 10-11 million tonne a year. 

Around the same time, a study by National Institute of Public Finance and Planning (NIPFP) said government subsidy gave kerosene an undue price advantage against other fuels and created ground for diversion. The NIPFP study also said kerosene and cooking gas subsidies benefit semi-urban and urban consumers more, respectively, rather than the rural poor. ‘‘Decades of subsidies have failed to shift the fuel consumption patterns away from biomass in rural areas.’’ 

Oil company executives said about 20% of the total kerosene supplied to the ration shops are used for adulteration of diesel and lubricants used by truckers. 

Now a substantial quantity is smuggled to Bangladesh, Nepal and Bhutan as the fuel is priced much higher in those countries. ‘‘When the studies were being conducted, kerosene was even being smuggled to Sri Lanka. But it may not be the case now,’’ the IOC executive said. 

Oil company executives say that about a third of the diverted kerosene is used as fuel (no doubt, by the poor at a hefty premium). The remaining quantity is used for adulteration or is smuggled out of the country. Usually adulteration with diesel is done in the ratio of 30:70 but in cases it can go upto almost half. ‘‘It all depends on how quick a buck the adulterator wants to make or on the diesel supply position,’’ one executive said.

Source: Article Window

Thursday, February 3, 2011

IN BRIEF - 17 JAN 2011


The Himachal Pradesh cabinet has given the 420-mw Reoli Dugli HEP in Lahaul-Spiti, which was earlier allotted to Moser Baer Projects Ltd, to L&T Ltd. The state cabinet decided to allot the project to L&T as it agreed to match the H1 highest bid of 80 crore. 

Indian Oil Corporation Ltd laid the foundation of the first state-of-theart Styrene Butadiene Rubber plant at the Panipat petrochemicals hub. The plant, which will produce 120 kt of rubber annually, will be set up in a joint venture with Taiwan State Rubber Corporation (30 per cent) and Marubeni Corporation of Japan (20 per cent) with IOCL holding the remaining 50 per cent stake. 

NEEPCO Ltd plans to restart work on the Tuirial HEP in Mizoram. The Cabinet Committee on Infrastructure has revised the cost of the 60- mw HEP from 369 crore to 914 crore owing to the delay. The project is scheduled to be commissioned within three months. 

Two power projects—1,200-mw North Chennai TPS and 1,000-mw Vallur TPP—in Ponneri taluk in Tiruvallur district of Chennai are expected to be commissioned within a year. While the 2x600 mw North Chennai project of Tamil Nadu Electricity Board will start generation by January next year, the 2x500 mw Vallur project of NTPC Tamil Nadu Energy Company Ltd is scheduled to be completed by year-end.

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