The Census 2011 reveals that around 78 million or 31 per cent of Indian households use kerosene oil to meet their lighting requirements, out of which 73 million are rural households.
They use kerosene –based lighting devices such as wick lamps and hurricane lanterns. Non-connected households or households in non- electrified areas use kerosene lighting devices during the evening hours.
A very low percentage of households also use kerosene for cooking. It is estimated that the average annual per household kerosene consumption for one kerosene lamp for four hours a day is 60 liters on an average which is 5 liters per month per a household. If we calculate the need of kerosene oil for lighting purpose of the 78 million household, the amount arrives at 4,680 million (4.68 billion).
But the kerosene supply in 2010-11 was 11.34 billion liters in the country. The data reveals that the kerosene supply was more than double the demand in 2010-11. Where did the additional supply goIJ There was obvious diversion of the subsidized kerosene to the black-market system.
It is a known fact that the kerosene is mixed with diesel illegally for vehicular use or for use by mechanical water-vessels. There have been incidents in the past when adulteration-mafias had murdered the enforcement officials. Yshwant Sonawane, the erstwhile ADM of Malegaon, Maharsrastra, was burnt alive in 2011 while raiding an oil-adulteration mafia. Shanmugam Manjunath, an IOC Grade-A sales officer, was killed in 2005 in lakhmipur Kheri in UP, while sealing an adulterating petrol pump. This is the story of huge pilferage of public money from a subsidized item like kerosene.
The Government of India allocates PDS kerosene to States/UTs on quarterly basis through a few public sector oil companies for distribution under the PDS for cooking and illumination purpose of the public. Further distribution within the States/UTs through the PDS network to various categories of consumers is the responsibility of the concerned States/UTs. In addition, the Union Government allows the States/UTs to draw one month quota of kerosene at non-subsidized rates during each financial year since 2012-13 for meeting special needs such as natural calamities, religious functions, fisheries and yatras. The States/UTs can also seek further additional allocation of non-subsidised kerosene from the Oil Ministry after exhausting the one month’s quota. It is observed by the experts that the arrangement of sale of high quantity of non-subsidised kerosene is harmful as the open market price of kerosene is still cheaper than the price of diesel.
Reduction of budgetary deficit by scaling down the subsidies has become the priority of the successive Union Governments since 1999. After the food and agriculture subsidies, fuel subsidies give major headache to the Union Finance Ministry.
The most worry is the pilferage of the subsidy. The reform in oil sector, initiated by UPA, gained momentum only after Modi Government took over. The Union Petroleum Ministry took pioneering steps in not only rationalizing the petrol- diesel pricing system but also by checking the corruption in cooking gas connectivity. Huge public money was saved through the reform. The reform on kerosene sector was a long overdue as more than 40 per cent pilferage has been noted by various panels and surveys since a decade.
In 2014, the Union Finance Minister stated that the Center would advise the States to achieve 100 per cent electrification and become kerosene free. He also said that the States would be given the choice to avail the cash subsidy in lieu of kerosene or access upfront subsidy for greener solar lighting systems. To check pilferage, there was plan for DBT. But the Union Government planned for expediting electrification and gas-connectivity to exit from kerosene system. The objective was better life for people and saving the wastage of subsidy.
Following the 2011 census data, the UPA Government was gradually phasing out PDS kerosene to the States with annual withdrawal of 5-7 per cent against the electrified rural households. As electrification and gas connections were implemented at faster rate after the Modi Government took office, the Union Government expedited the kerosene withdrawal process. But electrification or not, there is no harm in cutting the kerosene quota up to 40 per cent level as the pilferage level is more than 40 per cent.
In the past, there was no uniformity with regard to the per capita consumption of kerosene in the States. Various States used to lift various quotas of kerosene oil. The supply system developed over a period of time depends on their utilization. For example UP is satisfied with 5 liters per household consumption while Odisha is unhappy with 24 liters. States usually are seen reacting to kerosene quota cut instead of addressing the issue of pilferage as happened in the past in West Bengal.
In contrast to the kerosene-indulgent States, there are some other States/UTs which are working towards a kerosene free region. Delhi and Chandigarh have become kerosene free UTs. Karnataka has already announced a reduction in its PDS kerosene quota to 90,000 kilolitre (kl) against its allocated 5.09 lakh kl. Haryana targeted to become kerosene-free by March 2017.
The Odisha Government is reacting to the kerosene withdrawal process of the Union Government. The ruling BJD is protesting on streets against the quota-reduction, terming it as Central apathy. According to the State Government, the State received 3.89 lakh kl of kerosene during 2015-16 which was reduced to 2.92 lakh kl in 2016-17. The State Government further states that the 3, 23, 33,148 beneficiaries of 86,16,275 NFSA households are being provided with kerosene and the quota-cut affects them .The ruling BJD, wants 250 to 300 liters of kerosene per household per annum. The ruling BJD also demands non-PDS kerosene supply points for all 30 districts headquarters which is presently available in five locations. The State claims that the Centre has cut 36 per cent of the State quota this year.
Union Petroleum Minister Dharmendra Pradhan is of the view that 40 per cent families are connected with electricity and lPG, while the remaining 60 per cent are availing kerosene under the State quota. If the 2.48 lakh litres of kerosene is distributed among the 60 lakh people, each one would get more than 40 litres which is above the national State average quota of 19 liters. He hinted at checking pilferage by the State Government and making an appropriate arrangement to distribute the allotted kerosene among the real beneficiaries which will be sufficient for them.
Every issue cannot be raised in the Central-negligence format by the BJD. The Union Government is cutting quotas for all States as per its reform plan. No Government can be a silent spectator to the pilferage of the subsidy money nor remain happy to see its citizens languish with kerosene lamps in the evening. The State Government is failing to realize its federal responsibility to check corruption and enable the poor households to access electricity and gas connection. By reducing the kerosene pilferage, the sale of diesel will naturally increase which will fetch big revenue to the State Government. It is high time that the State should strive to be kerosene free like Harayana, Chandigarh and make a plan to achieve 100 per cent electrification in two years. During this time, the State Government must re-assess to locate the real-beneficiaries.