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| Subsidy on kerosene being pocketed by industrialists |
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Friday, May 30, 2008
ISLAMABAD: Millions of rupees in government subsidy on kerosene for providing the poor with the fuel are actually pocketed either by paint manufacturers or adulterators.
The federal government is providing subsidised kerosene by capping its prices at Rs41.44 per litre by providing a subsidy of Rs32.14 per litre, saying that it directly hits the poorest section of society, keeping their stoves burning long enough to make a meal.
The situation is contrary to the government’s claims of providing the poor with cheap fuel. But actually, it is only benefiting the paint industry, which uses kerosene as its main ingredient, now at much cheaper rate, reveals an official document about the monthly sale pattern of kerosene.
Kerosene consumption both at domestic and industry level is 19,000 tonnes monthly. 60 per cent of it is consumed domestically, whereas 35 per cent is consumed by the industry. The remaining is used by the transport and other sub-sectors, it added.
Giving a subsidy of Rs32 per litre on kerosene, the total amount for the subsidy is about Rs710 million per month. When multiplied by 12 months, it turned into billions, an official of OGRA, who wished not to be named, told this correspondent.
“It is indirectly benefiting the paint industry as kerosene is the main ingredient for making paints and it is a commercial product and not used by the poor for any means”, the same official lamented.
Talking about the use of kerosene for lighting and cooking, it is an obsolete practice even in the remote areas of the countryside, stated Senator Rukhsana Zuberi, when contacted for her views on subsidising kerosene. She said that subsidising POL products is not the right way. Instead, the government, particularly the policy makers, should correct the faulty pricing mechanism, she added.
She further said that margin should only be given on volume rather than on the price of the product.
Another use of kerosene mixed with POL products, particularly in diesel and in petrol, is a complete misuse of the subsidy, as the product is purely used for cooking and lighting by the poor, informed a local trader of kerosene, requesting not to be named.
The federal government has no control over keeping a check on the mixing of kerosene with other POL products. It is purely a provincial and district matter, said Additional Secretary Shaukat Hayat Durrani, when asked for comments.
However, Durrani confirmed the reports by The News, stating that the mixing of kerosene with POL products for monitory gains is on the rise but the ministry has no administrative tool to check this menace.
After repeated attempts to include Pakistan Paints Manufacturers Associationís viewpoint on the issue, this correspondent received no response. —AM
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ISSN 1563-9479 
