MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SMT. PANABAAKA LAKSHMI)
(a)&(b): The Government is providing fiscal subsidy on PDS Kerosene and Subsidized Domestic
LPG under the ‘PDS Kerosene and Domestic LPG Subsidy Scheme, 2002’. In addition to these
subsidies, the Public Sector Oil Marketing Companies (OMCs) are incurring under-recovery on
sale of PDS Kerosene and Subsidized Domestic LPG as the Government continues to modulate the
retail selling price of these products in order to insulate the common man from the impact of
rise in oil prices in the international market and in view of the domestic inflationary
conditions. The details of subsidy provided by Government under the subsidy scheme and the
under-recovery incurred by the OMCs during last 3 years and current year are as under:
(Rs. crore)
Year PDS Kerosene Subsidized Domestic LPG Subsidy# Under- Total Subsidy Subsidy# Under- Total Subsidy recovery to consumer recovery to consumer
2009-10 956 17364 18320 1814 14257 16071
2010-11 931 19484 20415 1974 21772 23746
2011-12 863 27352 28215 2137 29997 32134
Apr-Dec’ 576 21891 22467 1604 29148 30752
2012
# PDS Kerosene and Domestic LPG Subsidy Scheme, 2002’, Provisional for 2012-13. Gross under-
recovery incurred by the OMCs.
(c) & (d): PDS Kerosene supplies to Kerosene dealers are done on Ex-MI (Marketing
Installation) basis by Public Sector Oil Marketing Companies (OMCs). Further distribution of
PDS kerosene within the State to the ration card holders through ration shops/retailers is
controlled and monitored by the State Government. The State Civil Supplies Authorities carry
out inspection at Kerosene dealers to ensure that the product is delivered through the fair
price shops to the intended beneficiaries. In order to check the black marketing/ diversion of
PDS kerosene, the Central Government have made provisions in the Kerosene (Restriction on Use
and Fixation of Ceiling Price) Order, 1993, issued under the Essential Commodities Act, 1955
which stipulates that dealers have to sell PDS Kerosene at a price fixed by the Government or
OMCs and have to prominently display stock-cum-price board at the place of business including
the place of store at a conspicuous place. Under this Control Order, State Governments are
empowered to take action against those indulging in black-marketing and other irregularities.
Further, the Government has taken a number of initiative viz. Automation of Retail Outlets,
Third Party Certification of Retail outlets, Monitoring of movement of tank trucks through
Global Positioning System (GPS), etc. to check various irregularities/ malpractices like
adulteration, diversion etc. of petroleum products.
OMCs also undertake regular and surprise inspections of Retail Outlets and also take action
under Marketing Discipline Guidelines (MDG) and Dealership Agreements against those indulging
in adulteration and malpractices. MDG provide for termination of dealership in the first
instance itself for serious malpractices like adulteration, tampering of seals and unauthorized
fittings/gears in dispensing units.
OMCs hosted a web portal which enables public access to the movement of PDS Kerosene tank
trucks. It provides details of the tank truck movement carrying PDS Kerosene from their
Dispatch Units/Depots/ Installations to the various dealers along with their names, invoice
number, quantity of product, time of dispatch, tank truck number, etc. on the websites on real
time basis.
Inspite of all the efforts to check diversion, the possibility of adulteration/ diversion of
petroleum product like PDS Kerosene by some unscrupulous elements to derive monetary benefit
cannot be ruled out due to price difference between PDS Kerosene and Petrol / Diesel.
