Lok Sabha Question No. 2070 (UNSTARRED), answered on 2016-11-28
Subject: DBT in Kerosene
Ministry: PETROLEUM AND NATURAL GAS
Asked by: SURESH CHANABASAPPA ANGADI, KANWAR SINGH TANWAR, SUMEDHANAND SARASWATI, R. GOPALAKRISHNAN, VASANTHI M., VIJAY KUMAR HANSDAK, Pratyusha Rajeshwari Singh, ARKA KESHARI DEO

## LOK SABHA

## UNSTARRED QUESTION NO. 2070 TO BE ANSWERED ON 28 TH  NOVEMBER, 2016

## DBT IN KEROSENE

2070.   SHRI SURESH C. ANGADI: SHRI KANWAR SINGH TANWAR: SHRI SUMEDHANAND SARSWATI: SHRI R. GOPALAKRISHNAN: SHRIMATI VASANTHI M.: SHRI VIJAY KUMAR HANSDAK: SHRIMATI PRATYUSHA RAJESHWARI SINGH: SHRI ARKA KESHARI DEO:

## isVªksfy;e vkSj izkÑfrd xSl ea=h

## Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

(a)  whether  the  subsidy  on  kerosene  oil  under  Public  Distribution  System  (PDS)  has decreased tremendously during the current year as compared to previous years and if so, the details  thereof  along  with  any  proposal  to  increase  the  price  of  kerosene  and  to  waive  the kerosene fuel subsidy to the States in a phased manner;

(b)  whether  the  Government  has  plans  to  transfer  kerosene  subsidy  directly  to  beneficiary account by linking Aadhaar card in order to check the bogus consumers and if so, the details thereof;

(c) whether the Government has launched/proposes to launch the Direct Benefit Transfer in Kerosene (DBTK) and if so, the details thereof along with the norms/criteria and number of States covered including quantum of funds transferred under DBTK so far, State/UT-wise;

(d)  whether  the  State  Governments  has  increased  the  commission  of  wholesale  kerosene dealers  after  the  recommendations  of  the  Union  Government  in  this  regard  and  if  so,  the details thereof, State/UT-wise;

(e) whether there is any proposal to open non-PDS outlets by Oil Marketing Companies in the country and if so, the details thereof, State/UT-wise; and

(f)  the  steps  taken  by  the  Government  to  encourage  States  to  take  new  domestic  LPG connection in rural areas as against kerosene for fuel?

## ANSWER

## isVªksfy;e vkSj izkÑfrd xSl ea=h ( Lora= izHkkj ) ¼Jh /keZsUnz iz/kku½

## MINISTER OF STATE (I/C) IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI DHARMENDRA PRADHAN)

(a): The  total  subsidy/under  recovery  on  petroleum  products  since  2013-14  is  given below:

(Rs. crore)

| Particular   |   2013-14 |   2014-15 |   2015-16 |   H1 2016-17 |
|--------------|-----------|-----------|-----------|--------------|
| PDS Kerosene |     31255 |     24804 |     11496 |         4123 |

As the periodical revisions, approved by EGoM in June 2010 was not put in practice, one time increase in prices by Rs. 3.23/litre (excluding VAT) would have a large impact on the  consumers.    Therefore,  to  reduce  the  impact  on  consumers,  it  has  been  decided  to authorize  Public  Sector  Oil  Marketing  Companies  (OMCs)  to  increase  the  Retail  Selling Prices of PDS Kerosene by 25 paisa per litre per fortnight (excluding VAT as applicable in different State/Union Territories) during the period from 01 st September 2016 to 31 st January 2017 and Rs.0.23/litre on 1 st February 2017.

(b): Ministry  of  Petroleum  &  Natural  Gas  had  sent  communication  to  all  States/  UTs proposing   implementation of Direct Benefit Transfer in PDS Kerosene (DBTK) Scheme. Under  the  DBTK  Scheme,  PDS  Kerosene  is  sold  to  the  identified  beneficiaries  at  nonsubsidized rates and the applicable subsidy is directly transferred into the bank account of the beneficiaries. As per the provisions of the DBTK Scheme, 2016, 'Each beneficiary will have a  Aadhaar  number  with  linked  bank  account  and  digitized  ration  card  ID  through  which subsidy can be transferred directly to the linked bank account.  In case an Aadhaar number is not  assigned  to  a  consumer,  the  consumer  shall  be  offered  alternate  and  viable  means  of identification for delivery of subsidy'.

(c): Jharkhand  has  become  the  first  State  in  the  country  to  implement  DBTK  from 01.10.2016 in four districts namely; Chhatra, Hazaribagh, Jamtara and Khunti. Further, State Governments of Gujarat, Madhya  Pradesh, Chhatisgarh, Maharashtra, Rajasthan and Himachal Pradesh have indicated their willingness to implement DBTK.

The States/UTs who are voluntarily agreeing to undertake cuts in their kerosene allocation, beyond the savings due to DBT (Direct Benefit Transfer), cash incentive of 75% of savings towards subsidy during the first two years, 50% in the third year and 25% in the fourth  year  would  be  given.  The  calculation  will  be  based  on  net  savings  in  kerosene consumption at State level from the baseline. The baseline for calculation of savings shall be 90% of  the  2015-16  allocation.  An  amount  of  Rs.  226.54  lakh  has  been  provided  by  the Public  Sector  Oil  Marketing  Companies  (OMCs)  to  the  nominated  Bank  of  the  State Government of Jharkhand towards transfer of applicable subsidy amount to the bank account of the eligible ration card holders of 4 districts of Jharkhand where the DBTK Scheme has been implemented with effect from 01.10.2016. Also, cash incentive of Rs. 16,84,00,000/has been released to the State Government of Karnataka for the period April to June, 2016, towards  voluntary  cut  in  their  PDS  Kerosene  allocation  for  the  Financial  Year  2016-17. Similarly, cash incentive of Rs. 3,86,22,600/- and Rs. 3,11,22,630/- has been release  to the

State  Governments  of  Haryana  and  Telangana  respectively,  for    the  period  April  to  June, 2016, towards voluntary cut in their PDS Kerosene allocation for the Financial Year 2016-17.

- (d): The  Government  has  revised  Dealers'  Commission  on  PDS  Kerosene  w.e.f.    28 th October, 2016.  The revised rates of wholesale Dealer Commission by Government serve as guidelines for State/District and local authorities for fixing the retail (consumer) selling price of kerosene in urban/semi urban and rural areas.
- (e): With  a  view  to  ease  the  availability  of  Kerosene,  the  Central  Government  has amended  the  Kerosene  (Restriction  on  Use  and  Fixation  of  Ceiling  Price)  Order,  1993 allowing sale of Kerosene at commercial rate in the open market.  It is expected that this will reduce demand for diverted PDS Kerosene by improving availability of non-PDS Kerosene in the open market and will thus meet the demand of Kerosene for various legitimate end uses for the industry and for individual consumption by those who can afford it at market price. Accordingly,  OMCs  have  allowed  existing  Kerosene  dealers  (wholesalers)  of  OMC's  to market  white  Kerosene  (non-PDS  Kerosene)  to  small  consumers.  Revised  procedure  for making white Kerosene available to the interested Kerosene wholesalers has been prepared by OMCs and made available to all Kerosene dealers. Moreover the State Level Co-ordinator of  OMCs  have  sent  communication  to  the respective  State  Governments  to  nominate  and authorize one or more existing Kerosene wholesalers to market Non PDS Kerosene wherever demand exists.  Further  Ministry  of  Petroleum  and  Natural  Gas  has  also  advised  the  State Governments to consider suitable steps for allowing marketing of Non PDS Kerosene in their area  of  operation.   Some  State  Governments  have  already  permitted  existing  Kerosene wholesalers/private entities/Government bodies to market Non PDS Kerosene".
- (f): States/UTs would be encouraged to undertake voluntary cuts in their annual allocation of  PDS Kerosene quota. The States/UTs who are voluntarily  agreeing to undertake cuts in their kerosene allocation,   beyond the savings due to DBT  (Direct  Benefit Transfer), cash incentive  of  75% of  savings  towards    subsidy  during  the  first  two  years,  50%  in  the  third year and 25% in the fourth year  would be given. The calculation will be based on net savings in  kerosene  consumption  at  State  level  from  the  baseline.  The  baseline  for  calculation  of savings  shall  be  90%  of  the  2015-16  allocation.  The  cash  incentive  may  be  used  for promoting rural electrification and solar home systems in un-electrified and under-electrified areas.

Further, the Union Government, as a part of its commitment to provide clean cooking fuel solution to rural masses, initiated several measures to  increase LPG coverage aided by Corporate  Social  Responsibility  (CSR)  funds  and  also  launch  of  Pradhan  Mantri  Ujjwala Yojana to provide 5 crore connection to Below Poverty Line (BPL)  households over a period of three years. These measures have reduced the demand for kerosene both for lighting and cooking purposes.