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LATEST NEWS UPDATES | Capped: subsidised theft of cooking gas -Sambit Saha

Capped: subsidised theft of cooking gas -Sambit Saha

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published Published on Oct 16, 2012   modified Modified on Oct 16, 2012
-The Telegraph

Calcutta: Demand for commercial gas has risen sharply in Bengal, prompting suggestions that the subsidy cap on domestic cylinders has unmasked one of the worst-kept secrets in the country.

The sudden spurt is being attributed to demand from commercial establishments and auto-rickshaws that were so far depending heavily on the subsidised cooking gas rampantly pilfered from the domestic segment.

“We have been selling 6,000 (commercial) cylinders a day (to establishments) after the quota on subsidised domestic LPG came into effect from September 14. It used to be about 4,000 cylinders before,” a senior Indian Oil Corporation official said.

The IOC official mentioned a rise in the sale of LPG to auto-rickshaws, up from 40,000 litres a day to 50,000 litres. Other public-sector oil companies too are experiencing a similar trend. Unlike in Delhi and Mumbai, where auto-rickshaws run on compressed natural gas, the three-wheelers in Calcutta use LPG.

The wide gap between the prices of subsidised gas meant for home kitchens and commercial cylinders was an incentive for the racket that no government could stop. The difference used to be nearly Rs 650 a cylinder.

However, the cap on subsidised domestic cylinders has tightened monitoring and tracking and reduced the chances of pilferage. If any dealer spirits away a subsidised domestic cylinder, it will show up in someone’s quota and the subsidy-denied consumer is unlikely to let it go unchallenged now.

The sharp rise in the price of non-subsidised gas has also shrunk the incentive for the pilferage. At Rs 925, the non-subsidised domestic cylinder now costs only Rs 269 less than the same quantity of commercial gas. (Unlike the 14.2kg domestic cylinders, the commercial ones weigh 19kg and they used to be priced at Rs 1,403 apiece. Now they cost Rs 1,598.50 per cylinder.)

The oil companies now have an incentive to keep a tight leash on the subsidised cylinders, painstakingly checking bona fide users, because diversion would mean losing out on extra income, which they can ill afford.

Last-mile pilferage has been the bane of all government welfare programmes and keeps frustrating the goal of providing targeted subsidy to those who need it.

Oil company officials admit that there used to be rampant diversion of subsidised domestic LPG cylinders for commercial use earlier, and do not rule out the involvement of some cooking gas dealers in the racket.

An oil industry veteran recalled how, during a raid on a sweets shop in Calcutta, it was found that the owner had taken seven domestic LPG connections in the names of his employees and was using them to make sweets. There have been many instances of autos using domestic LPG to cut cost, too.

Oil companies have tightened the monitoring of connections but say that no genuine customer is being harassed. “We are only trying to weed out dubious cases,” an IOC official said.

For instance, not all consumers need to provide a “know your client” (KYC) form to their LPG dealer. “Please go to the transparency portal of oil companies and see if your name is on the list of those who need to provide KYC. Else, wait for our letter or text message,” an official said.

Oil companies said individuals with multiple connections would get to keep only one. Multiple consumers having the same address must provide an affidavit saying they have different kitchens. The distributors will physically verify all such cases while the oil companies will make random checks.

The Telegraph, 16 October, 2012, http://www.telegraphindia.com/1121016/jsp/frontpage/story_16095779.jsp#.UHz5a655ykw


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