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Oil cos asked to work out subsidised diesel scheme for farmers

Our Bureau

New Delhi , July 13

THE Petroleum Minister, Mr Mani Shankar Aiyar, has asked the public sector oil marketing companies to study the possibility of providing diesel to farmers using diesel-fuelled pump sets and fishermen using boats powered by diesel motors.

In a meeting held last week, Mr Aiyar assured the oil companies Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation that if they could work out a delivery mechanism for the supply of subsidised diesel, then he would find the requisite funds from the Finance Ministry to pay for the subsidy.

According to oil company officials, although they have been asked to study the proposal, there is little doubt that given the tax distortions in the system, dual pricing of diesel is bound to result in leakages.

In regard to supply of subsidised diesel to fishermen, the Government already has a programme that spends around Rs 50 crore as subsidy in this regard.

However, the scheme has not been very effective on two counts. First, the quantity of subsidy is inadequate and second, the delivery mechanism is inefficient resulting in long delays in reimbursement of subsidy.

According to the oil marketing companies, if they are to implement the scheme they would require to begin with a survey of the farming community to ascertain the users of pump sets.

The oil companies are yet to get back to the Petroleum Ministry on the feasibility of the Minister's proposal to supply subsidised diesel to certain segments of users.

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