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Extinsive mixing in diesel

Severe shortage of kerosene may hit country

TAHIR DHINDSA

ISLAMABAD: A severe shortage of kerosene oil may hit the country within the next two weeks as dealers have started mixing it extensively in diesel after the latter's price hike by over 11 percent has created a Rs 1.63 difference in the prices of the two commodities.

The All Pakistan Petroleum Cartage and Traders Association (APPACT) told Business Recorder that the large scale mixing was giving windfall profits.

It is learnt that the Ministry of Petroleum has taken strong exception to the Finance Ministry's revision of diesel prices which led to this menace.

Sources said the summary for the hike in petroleum prices was, as usual, prepared by the Ministry of Petroleum, but the substantial difference between the prices of two commodities was created by the finance ministry.

Through March 20 notification, the government raised high-speed diesel price to Rs 12.88 and kerosene oil to Rs 11.25 creating a net difference in price of the two commodities of Rs 1.63.

Previously, this difference was not big enough for adultration on a large scale. The old policy decision of November 1990 kept the price difference to the minimum which kept in check any adulteration. It was so successful that the countrywide demand of kerosene oil dropped by about 45 percent within a month. The price difference at that time was only 70 paisa.

The policy decision was violated in the name of the poor by the Benazir Bhutto government on March 14, 1996, when the difference went up to Re 1.05.

It was alleged that the price adjustment mechanism was tampered with at the behest of the spouse of the then prime minister. At that time, too, the Ministry of Petroleum had opposed the decision tooth and nail and it was reversed after a month.

As a routine procedure, the government used to mix a specific dye in each fuel oil so that adulteration could be checked. But this practice has been stopped. Now the government cannot check adulteration even if it wants to.