Fuel for sorrow

Published: Saturday 15 October 1994

LIQUID petroleum gas (LPG) connection holders in India, by virtue of this privilege, are entiled to 4 litres of kerosene from the public distribution system. Those not so fortunate are supposed to get a requisitely higher quantity. The division sounds fine in theory but works only distortedly in practice, giving fuel to the conviction in some informed quarters that domestic energy subsidies in this country only favour the urban middle class and higher incomed groups.

The latest confirmation of their belief has come from a recent estimate by the Delhi government that nearly 40 per cent of the LPG-using families continue to be favoured with kerosene quotas much higher than their entitlement. Most of the nearly 5 lakh-odd households so charged are of the opinion that they are hardly culpable, since they do not draw on their kerosene quotas in any case.

Yet, figures supplied by the recent state government study, and other oil supply agencies, vindicate the estimate that nearly 1 lakh litres of kerosene are drained off the PDS in the name of these non-consumers. At exorbitant blackmarket prices, the kerosene flows smoothly to commercial users, and sluggishly to the capital's poorer population.

The whole story (see pages 5-7) immediately suggests that it could not occur without the direct and deliberate involvement of public officials. The functionaries of the civil supplies department are entrusted to ensure that the fair price shopowners only draw the quantities which go directly to card holders. They don't. Middle and senior level officials are expected to periodically assess demands being made on the PDS in their respective zones. They are known not to.

Further, domestic fuel subsidies seem to be entirely lopsided. The blackmarket in kerosene is exists because it is liberally sanctioned for those upper income groups who do not use kerosene for domestic cooking or for illumination. Admittedly, there is a growing demand for kerosene for the rapidly increasing number of generator sets in the capital. There is no reason why the families or establishments who use it should not pay free market prices for this "essential" commodity. Discontinuing discounts to this section would enable the PDS to be targeted at the lower income groups much better.

The argument is strongly supported by the irony that in the absence of an adequate supply of subsidised kerosene, the poor are forced to alternatively depend on fuel or coal. Clearly, domestic energy policies need to be reworked entirely.

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