The Hindu : Nominal rise in petrol sale

Online edition of India's National Newspaper
Wednesday, May 28, 2003

Southern States

Southern States - Tamil Nadu

Nominal rise in petrol sale

By N. Ravi Kumar

CHENNAI May 27. Consumers of petrol in the State and Pondicherry seem to have taken in their stride the frequent revision and increase in its price, as the oil industry registered over nine per cent growth in the retail sale of the fuel in 2002-03.

The same, however, cannot be said about High Speed Diesel users, as the four national oil marketing companies, together suffered nearly four per cent decline in the total sale of the widely-consumed petroleum product. There was also a slump in the direct sale of petrol, by about 42 per cent.

Synchronising with the fiscal, the first year, after the dismantling of the administered pricing mechanism for petroleum products, saw petrol prices (in Chennai) zoom by Rs. 8.07 per litre. Barring three marginal downward revisions in between, the price kept rising constantly in the fiscal, before coming down in the current financial year.

Similarly, HSD prices went up in the year by Rs. 6.55 per litre. Like petrol consumers, there was no respite for HSD users, except three reductions, on August 16, November 16 and December 1, last year.

The four companies — the Indian Oil Corporation, the Bharat Petroleum Corporation, the Hindustan Petroleum Corporation and the IBP — together registered a 9.30 per cent growth in the petrol sale (retail) in 2002-03, which a senior executive of the oil industry describes as "nominal".

The retail sale of HSD, however, dropped by more than three per cent compared to the previous fiscal's performance, while the direct sales of the fuel slipped by over six per cent. Though the general industrial recession continued to cast its shadow on the sale, what took the toll was the increased use of parallel market (imported) superior kerosene, popularly known as white kerosene, in alleged violation of various rules and guidelines.

The State budget (2003-04) announcement hiking the sales tax on white kerosene from four to 25 per cent, however, has heartened the oil industry, which hopes that the measure and the "proactive" stand of the Government on the issue would help it gain the lost HSD sales. The menace, the senior executive of the industry said, could only be curbed by imposing additional taxes to avoid the price differential in favour of white kerosene — which continued to be cheaper by almost Rs. 4 a litre compared to HSD. Effective enforcement is also required for the Government to reap the benefit of imposing the sales tax on the imported product.

The trend of substituting white kerosene for HSD in heavy vehicles and generator sets raised the hackles of the oil industry. G. Prasanna Kumar, Director-General, Anti-Adulteration Cell, Ministry of Petroleum and Natural Gas, said, in January, the quantity of the imported kerosene flowing into the State was not justified by the demand for the product for `genuine' uses. About 470 TMT of the product was brought into the State from the ports of Cochin and Mangalore till December 2002.

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