Citizens' Issues
The fuel mafia must go up in flames

How long will the ‘common’ citizen wait for the system to cleanse itself? Good clean unadulterated fuel is your right. The time to act is now!

Fuel adulteration is a subject that your humble correspondent has been very familiar with over the last few decades, in his many roles-as a seafarer working on oil tankers carrying clean and dirty petroleum products, as a shipbroker working for Transchart-the Government of India's chartering division which used to and still hires ships, as a cross-country rally-driver always on the lookout for good clean fuels, as an employee of a multimodal shipping company which handled thousands of containers in India by road and rail, as a freight forwarder who for a very short while owned and operated a modest fleet of mini-trucks, as a close relative of people who own and operate filling stations in India, as a close friend of somebody whose family made their fortunes and was part of the largest oil distribution network in remote parts of J&K...

And finally, as a motoring media-person often on the roads who kept his eyes and ears open and refused to get co-opted by the various strong lobbies at play in this amazingly wide business.

So here are a few simple truths, which need to be brought out again, in the wake of the Sonawane murder off Manmad, Maharashtra, a few days ago. Incidentally, such acts of violence against people who try to expose crimes are becoming increasingly commonplace in Maharashtra lately, it would seem-and nowhere in this does it appear as though "immigrants" are to blame.

Here are a few noteworthy points:

1) There is nothing new about fuel adulteration in and around the Mumbai-Pune-Nashik spheres of influence, within which Manmad certainly falls. As an important rail and road junction, and also as an important staging point for a variety of Armed Forces movements, one would have imagined that the powers of the State, whether Central, State or local, would have prevailed to an extent where such rampant and flagrant crimes could be controlled. Far from it-as any small auto or jeep-taxi operator will gladly let you know-the complete area is beholden to the smuggled as well as adulterated fuel rackets.

2) What is "smuggled" fuel? Apart from small ocean tankers or "bunker barges" creeping into the Konkan coast inlets and discharging into smaller country craft for delivery upcountry, "smuggled" fuel also refers to fuel that is pilfered from the many Armed Forces formations in that area. The height of "smuggling" was reached a few years ago, when it was discovered that the extremely high quality aviation fuel used for the IAF's Sukhoi Mk-II aircraft based out of Pune had also been adulterated. Nothing much is known about what happened to that investigation, though it was reported in the media at that time, too.

3) The side-roads of Maharashtra, and there are many, especially in the areas where rail transport has not made a dent, are dotted with signboards proclaiming "diesel/petrol available here", even at locations where genuine filling stations are not exactly rare. A quick pit-stop here will reveal that most of this fuel is certainly not genuine-a strip of blotting paper is enough to double-check this 'petrol'. And they will always be flying flags proclaiming theirpolitical affiliations.

4) But the real games are played in and around the larger cities. The numbers are phenomenal, the middle-class is not likely to have the time or energy to protest-and the risks are non-existent-because the complete system has been co-opted. Certainly, it happens all over the country-but the open defiance with which it happens in Pune, a city where the octroi games add to the complete experience of adulterated everything, is unmatched elsewhere. With the exception, maybe, of Mumbai and Nashik.

Here is one such personal experience, dating back to the winter of 2005, when I was a resident of Pune. And operating as well as driving my own car there, a reasonably decent diesel car, but one that I knew every breath and pulse beat of.

If you live in any city for any length of time, you get to learn very soon which are the "good" filling stations, and which are suspect. By and large, the "CoCo", or "Company Owned Company Operated" pumps are reliable, and the long lines of motor vehicles waiting outside would bear testament. And then, there are those which are totally unreliable, which even the locals avoid.

One such filling station, operated by HPCL, was located inside the largely residential area of Aundh. Living in nearby Baner myself, I had been warned not to take diesel from there, by others in the same area. Despite this, one fine day when I was away, the office staff decided to top up the car-and took fuel from there.

I got into Pune, and as soon as I started driving the car, felt the difference in performance. So I went to the filling station in question, and asked to see the owner, the manager and the complaint book. The answer I got from the attendants was, in all three cases, that the owner was a senior Congress politician, Mr Datta Gaikwad, in those days loyal to Mr Suresh Kalmadi, who was also a leading HPCL distributor as well as kingpin in the automobile and fuel business in and around Pune and for that matter all over the Maharashtra and Goa belt, and that I could lump it but nothing and nobody was available.

In addition, I was given the usual spiel by the hangers-on about how non-Maharashtrians were damaging the fabric of the city, which was even then becoming the standard ploy.

So, in the next phase, I decided to escalate the issue to HPCL. One Mr Ingle was listed as the HPCL Area Manager, and his mobile phone number provided. I called Mr Ingle, who gave me, in turn, the royal run-around, and directed me to visit his office, offer a written complaint, provide him with samples, and do many more things, in triplicate and in three bottles full. Interestingly, within one hour of that phone call by yours truly, I started receiving calls from the dealer as well as his 'friends' who wished to meet me, to advise me. In Pune, people know what this "advice" means.

A lesser man would have given up at this juncture-but by then I was in full flow, so I escalated the issue by email and written letters to everybody there was at HPCL. Interim, of course, I made sure I avoided Aundh-because by then HPCL and their cohorts, one Mr GSV Prasad Gottipati, Chief Regional Manager, presiding, had started laying on the heat. Open threats, followed by tapping of telephone bills and data therein, as well as insinuations which were followed by a major campaign by no less than the Chief Manager, PR & Corp Communication, Laxman Motwani, to force me into withdrawing my complaint.

The matter then reached another level when the Maharashtra Herald, an independent newspaper in those days, organised a methodical survey of over 60 filling stations in the Pune-Pimpri-Chinchwad area, for fuel quantity and quality. The report was carried on its front page and was very illuminating. The MH was sold to the Pawars subsequently and the rest is media history.

Eventually, of course, somebody from assorted Directors and Chairman's offices offered apologies. Another bunch promised action. Some people got transferred around. And Life went on. Till Life stopped for Mr Sonawane. On a side road off Manmad. While his driver and assistant were threatened or simply ran for their lives, knowing the fuel mafia-who wants to tangle with big politicians or their henchmen, then?

Point here is this-the oil companies, state owned ones especially, have more clout with every segment of society than many other entities.

Fuel adulteration, from the shipping and refinery stage onwards, can not be carried out without their direct complicity. Efforts to find out more about tank-cleaning using the Right to Information (RTI) Act, for example, are met with stonewalling. There is no cogent response on what exactly is better with the so-called "premium" fuels. So, when the rot flows top-down, why are we surprised about the effect it has at the bottom of the pyramid, the last mile from tank farm to retailer-it is actually nothing more than a final cover-up and blame point for a racket that starts at the refineries in far-away Persian Gulf countries or closer home in India.

So, the unfortunate and fiery end that Mr Sonawane met off Manmad does not surprise me, though it certainly saddens me. It has made it to the media because he was a Government official, a senior one at that, and the open arrogance had reached a point where the perpetuators were simply not scared of anybody. They knew, and probably still know, that the system of fuel purchase and distribution in India will continue to protect them.

In a day and age when even pizza delivery companies can and do track their delivery staff by a variety of methods, when the quality and quantity of orange juice in tetra-packs can and is maintained flawlessly, when milk distributed loose using Mother Dairy tankers is of a quality that has become a benchmark internationally-we are to believe that the oil companies and the Ministry in charge cannot assure us unadulterated fuel?

The rot in the retail fuel business does not start and end at a small dhaba off Manmad. It certainly starts in the lofty towers of the Chairmen's office of the state-owned oil companies-and if anything needs to be fixed, it starts from there. Let us not just let it end with a hartal by Government officials in Maharashtra-as co-sufferers, we need to get a message across that Mr Sonawane did not die in vain-get out of your cars and bikes, and demand that you be given the complaint books, and write what you think and feel in them-today.

Today. Good clean unadulterated fuel is your right, Time to stand up and demand it.

User

COMMENTS

malq

5 years ago

I think this deserves a mention here, especially in context with Mr. Manohar Ingale of HPCL . . .

http://www.punemirror.in/index.aspx?page...

""The Anti Corruption Bureau (ACB) of Central Bureau of Investigation (CBI) has raided several flats, offices and bungalows belonging to Manohar Maruti Ingale, a project manager with Hindustan Petroleum Corporation Limited (HPCL) on Friday evening. ""

Java

6 years ago

One answer to this problem can be to end the artificially low price of kerosene and let it be market determined. The poor and those who deserve a subsidy, can get a certain limited quantity against their ration cards and this can be monitored through centralised on-line databases. At a time when a large number of even the rural poor are moving to gas for cooking, most of the heavily subsidised kerosene is being used for adulteration. And since this subsidy is being given in the name of the poor, it is incumbent upon the government to know, through survey or census, how many of the poor actually use kerosene now and provide for the subsidy directly, only to those identified users.

Sunil

6 years ago

Why dont renewable fuels such as Biogas is subsidised?
why dont people start using Biogas which can be easily generated thru any biodegradable waste and also attracts carbon credits?
why government doesnt go for renewable field options?
why technologies such as waste plastic to fuel doesnt get more and more publicity?
i have personaly seen sucha s technology in pune where 5000 kgs of food waste is being converted to biogas and electricity and also waste plastic to fuel, Mr Sumedh Bapat and Mr Srinivas kasulla.
I met Mr Amit sawant on their site and he explained me everything and i personally liked it very much.

Rajan Manchanda

6 years ago

It is tragic Mr.Sonawane had to sacrifice his life for the Govt to act. All of a sudden raids were conducted all over and people arrested. Over night it was discoverd that adulteration was taking place. All news papers and TV channels beamed the story. Next few days will be full of action. A new scam will than emerge. The story of adulteration will than gather dust. Mr. Sonawane will then be forgotten except by his family who will continue to mourn and remember the dreadful day for the rest of their life.

UNLESS THERE IS STRINGENT ACTION FOR ADULTERATION (NOTHING LESS THAN IMPRISONMENT) MILK , FUEL , FOOD ITERMS , MEDECINES etc the dubious trade will continue to flourish. We can shed crocodile tears every time a Sonawane is martyered.

REPLY

V Malik

In Reply to Rajan Manchanda 6 years ago

Thank you for writing in. Why don't we, simply, try to stop buying adulterated and fake stuff?

Java

In Reply to V Malik 6 years ago

I am sorry, but this is not easy for a common man. Just how do we know the stuff is fake or adulterated? How does one know, for instance, that the medicine bought at the chemist is spurious?
The answer is better implementation of our laws by those entrusted to protect them - the government servants. NGOs and pro bono publico entities can help to a limited extent, but if the govt has stopped functioning, then why do we need it? It should be changed. That includes not just removing the political parties, but the bureaurats who are not performing.

K B Patil

6 years ago

The only reason for the rot is we, the educated middle class. All we do is read articles like the above and then mutter darkly about the state of affairs and then get on with our lives. As long as we dont shed our apathy and hit the streets, our miserable lives will continue unchanged and the government headed by a highly regarded NPA (non performing asset) will continue with its patronage of crooks.

For all the hell and brimstone by the Mumbaikars immediately after the terror attacks, what was the voting percentage in South Mumbai? It was a pathetic 40%. There will be no release from bondage without a sustained struggle.

REPLY

Prakash

In Reply to K B Patil 6 years ago

Though I appreciate your view, I just want to mention that although after 26/11 people hit the street like never before (post independance) and gathered at Gateway of India, what has happened to Kasab ? Govt is still spending crores after him and the case just gets stretched since years. The only justice done due to massive public pressure, in my view, is in Jessica case. There has to be a continuous pressure and interest from public to make Govt act.

K B Patil

In Reply to Prakash 6 years ago

Mr. Prakash, you have mentioned the issue but interpreted it differently. When the issue of 26/11 was hot, people were angry and came out and displayed their anger. What happened a few months later? The best way would have been seen in a high voting percentage. But the percentage of voting was pathetic i.e the sense of anger against decision makers had evaporated and so the politicians were back to their games. Most of the Indian middle class is not willing to come out and face the heat and so there is no pressure on the govt.

RNandakumar

6 years ago

Dear Mr.Malik,
Thank you immensely for your excellant article.It is tribute to the bravebut late Mr.Sonawane. The last but one paragraph needs to be printed in all Dailies in the front page as a demand by the road user. Could any Govt afford to be so inefficient. Our people deserve a better Govt at the centre.

REPLY

V Malik

In Reply to RNandakumar 6 years ago

Thank you for writing in. Please do share the article, grateful.

Bhamy V Shenoy

6 years ago

There are thousands of stories like this one can write regarding oil adulteration. Hundreds of seminars, workshops, conferences have taken place to stop oil adulteration. Planning commission has studied the problem and made many recommendations. The government knows exactly what needs to be done. But they are afraid to implement them. It is just like PM knew that Raja was involved in 2G scam, but could not act lest he lose the support of DMK. In the case of kerosene he loses not just the support of his allies but even his own parties. There are studies which show the involvement of politically active netas of all political parties in this mother of all scams. It is this which is preventing any meaningful reform in kerosene distribution. It is the same which has made media to lose interest in reporting on kerosene scam. Only because there was brutal murder. media is allocating some space for this topic. Otherwise even Money Life would not have bothered to deal with this old problem.

REPLY

V Malik

In Reply to Bhamy V Shenoy 6 years ago

Thank you for writing in, Shenoy ji. Agreed with all your points - except that MoneyLife would not have bothered to write about this. MoneyLife have written on the subject in the past, too, but this is the first time I am naming some of the known entities - and MoneyLife have kindly carried the same.

Please let us try to work together to fix this issue.

Humbly submitted.

Bhamy Shenoy

In Reply to V Malik 6 years ago

thanks for your very positive response. You are right that Money Life published your article and it is much appreciated. I was disappointed with Sucheta for not responding to you my emails on this topic. She knows me and my interest. Please browse the site of Global Subsidy Initiative to get a comprehensive report on kerosene reform in India since world war II .

Pradeep Hattangadi

6 years ago

Mr. Malik has been specific about Maharastra. However, this is a national problem. Looking back we had the case of Manjunath an OMC officer who was shot point blank. I don't think anyone even remembers the case. The root problem as Mr. Malik has stated is most of the fuel station are owned by Politicians either in their own name or by proxy. The name of the Politicians or the Party differs but essentially it is the political class. Yesterday Mr. Jaipal Reddy was talking about re-introduction of markers. Will this solve the problem No. While the Government is not much bothered about food inflation (only lip service), it is certainly not bothered about the price differential in various fuels which is the major cause for these kind of incidents. So in the name of poor and PDS (Public Destruction System), price of kerosene is kept low which as it happens is the main culprit for the adulteration.

REPLY

V Malik

In Reply to Pradeep Hattangadi 6 years ago

Thank you for writing in, Pradeep. You are correct, this article was specific about Maharashtra because I can not recall any Government official being burnt in any other part of the country for trying to shoot a video of fuel being adulterated, and also because it relates to my experiences there. In addition, the element of coastal smuggling underway in the Konkan region is probably unmatched elsewhere, especially as pertains to fuel.

The solution, even if the Government wishes to continue with the subsidy on kerosene, is brilliantly simple - test the fuel for quality and quantity at the retail outlet. An efficient lab to ensure this will fit inside a small suitcase, the sort we use as hand baggage in aircraft, and the price is about the same as an airline ticket too.

And then, permit the public to carry out these tests under controlled conditions, at the filling stations.

Will the oil companies allow this? They already have all this, and more - but will not do so. As other oil companies worldwide morph into energy companies, our bunch of colonial remnants is still into increasing profits by any means whatsoever.

mukesh

6 years ago

we should publish the name of fuel stations where we get clean fuel

REPLY

V Malik

In Reply to mukesh 6 years ago

Fairly simple - just ask around with the taxi/auto drivers, and you will come to know. Or, use the CoCo pumps, if possible.

ramchandran

6 years ago

kindly start a campaign for voicing our convern on this issue. This Govt is obviously very insensitive & lacks action.

REPLY

V Malik

In Reply to ramchandran 6 years ago

Thank you, Ramchandran ji - please start today in your own way, too.

Result analysis 3QFY11: ICICI Bank, HDFC Bank

Asset quality was a big positive for both banks—no new slippages for ICICI Bank, lower slippages for HDFC Bank

ICICI BANK

  • Both NII and profit came in at the higher end of expectations.
     
  • Slight pick up in loan growth and good asset quality were key positives, but slower CASA growth was a disappointment.
     
  • Staff costs were higher due to a rise in number of employees and salary hikes—this was also the main reason for a 26% rise in operating costs.
     
  • Slippages were down and as a result provisions declined by 54% year-on-year. Has achieved RBI’s NPL coverage norm of 70%.
     
  • Loans grew by 15% year-on-year and 6% quarter-on-quarter—still catching up with competition. Out of total loan growth, the corporate segment was up 57%.
     
  • NII growth of 12% was mainly driven by asset growth.
     
  • CASA growth moderated.

 

  • Corporate and international make up for more than 50% of ICICI’s loan book while home loans account for 66% and auto about 26%. The rise in corporate loans augurs well for fee growth (note than ICICI is a leader in the loan syndication business).

 

ICICI Bank Q3 FY11 Result Highlights

(Rs million)

Dec 09

Sept 10

Dec 10

Net interest income

20,581

 22,044

 23,117

Employee expenses

4,270

 6,243

 7,605

Provisions

10,022

 6,411

 4,643

Net profit

11,011

 12,363

 14,370

NIMs %

2.6

2.6

2.6

Gross NPAs (Rs billion)

89

 98

 102

Gross NPLs %

4.8

5

4.8

 ICICI Bank shares have not done well over a three-month period and have been falling after declaring results along with the rest of the market. However, in a six-month period, they have still outperformed the Sensex.

 

HDFC BANK

  • Both net profit and NII came in at the higher end of expectations.
     
  • NIMs came off a bit but NII growth was helped along by loan growth at 33% year-on-year. However, quarter-on-quarter loan growth was modest (just 1%) due to repayment of short-term corporate loans.
    Deposit growth was 24% on year but -2% on quarter.
     
  • CASA ratio was stable at 51% but the management hinted at pressure on this.
     
  • Asset quality continued to improve.
     
  • In total loans, share of retail loans rose to 56% from 52% in Q2 but the share of secured loans is rising and this will cushion against potential asset quality risks.
     
  • Branch opening is putting some pressure on expenses. The bank opened 15 branches and 400 ATMs in 3QFY11 taking the total branch network to 1,780 branches and 5,121 ATMs. The management indicated that 4Q would see a rise in the number of branches as most of them are nearing completion.

HDFC Bank Q3 FY11 Result Highlights

(Rs million)

Dec 09

Sept 10

Dec 10

Net interest income

22,239

 25,263

 27,767

Employee expenses

5,786

 7,106

 7,251

Provisions

4,477

 4,545

 4,659

Net profit

8,185

 9,121

 10,878

NIMs %

4.3

4.2

4.2

Gross NPAs (Rs billion)

19,741

 18,412

 17,818

Gross NPLs %

1.6

1.2

1.1

 HDFC Bank shares have not done well over a three-month period and have been falling after declaring results along with the rest of the market.

User

COMMENTS

Ashish

6 years ago

For Author : Pls confirm the Gross NPAs (Rs billion)
mentioned for ICICI and HDFC , whether the figures given in I bank is 3 digits and in HDFC is 5 , indicates high book size of HDFC?

REPLY

Munira

In Reply to Ashish 6 years ago

Dear Ashish,

Thanks for pointing out the error. The figures for ICICI Bank are in Rs bn and for HDFC Bank in Rs mn. Apologies.

Regards,

Munira

Friday’s Market Preview: Range-bound opening likely

The domestic market is likely to open range-bound on tepid cues from the global arena. The US markets closed with marginal gains on Thursday on mixed economic news while the Asian pack is largely in the red in early trade on Friday as investors were jittery ahead of earnings reports from major corporates and a cut in Japan’s credit rating by Standard & Poor’s. The SGX Nifty was down 18 points at 5,612 from its previous close of 5,630.

Back home, Binani Cement, Havells India, ONGC, Oriental Bank of Commerce and Siemens, among others will announce their quarterly results today.

Yesterday, the market opened higher on better-than-expected quarterly data announced by some corporates and optimism from the Asian markets. The banking sector, which was the top loser on Tuesday, witnessed some buying in early trade. However, selling pressure soon led the key indices into negative territory. A marginal rise in the weekly food inflation figures also added to the woes. Volatility was associated with the expiry of the January futures and options (F&O) contract. Selling became intense in post-noon trade, dragging all the sectoral gauges into the red and closing lower for the second day in a row.

The Sensex finally ended 285 points down to close at 18,684 and the Nifty fell 83 points to close at 5,604. Thursday’s fall has broken the past week's low, hitting a new four-month low. The decline takes the market in the bear market territory. The next supports are at 5,550 on the Nifty and 18,500 on the Sensex, after which we may witness a pre-budget rally.

The US markets closed with marginal gains overnight on mixed economic news. The index of pending home resales rose 2% in December, more than forecast, after a 3.1% gain the previous month. A report from the Labor Department showed applications for jobless benefits increased by 51,000 to 454,000 in the week ended 22nd January. Besides, orders for durable goods fell 2.5%, weighed by volatility in demand for commercial aircraft, a report from the Commerce Department showed. Excluding transportation, bookings increased 0.5% after a 4.5% jump in November.

Among corporates, Qualcomm, Caterpillar Microsoft posted better-than-expected results, while AT&T and Proctor & Gamble disappointed.

The Dow gained 4.39 points (0.04%) at 11,989.83. The S&P 500 added 2.91 points (0.22%) at 1,299.54. It was the highest close since 28th August 2008, when it last finished above 1,300. The Nasdaq advanced 15.78 points (0.58%) at 2,755.28.

Markets in Asia were mostly lower in early trade this morning as a cut in Japan’s credit rating by Standard and Poor’s, which cited persistent deflation and political gridlock as reasons for the rating cut. Cautiousness ahead of earnings report from key heavyweights across the region also weighed on investors.

The Shanghai Composite declined 0.55%, the Hang Seng shed 0.07%, the KLSE Composite was down 0.29%, the Nikkei 225 fell 1%, the Straits Times declined 0.05% and the Seoul Composite lost 0.60%. On the other hand, the Taiwan Weighted gained 0.15%.

Meanwhile, the Indian economy is likely to grow by 8.7% annually and generate 3.75 crore jobs by 2020 on the back of investments in skills and infrastructure, a report by Accenture said.

Accenture, a global consulting firm, in its report released at the World Economic Forum at Davos added that four major economies—India, Germany, US and UK—together account for nearly two-fifths of the world economy.
 
It said that India’s economy would annually grow by “8.7%, compared to 8% expected currently; 37.5 million (3.75 crore) more jobs in 2020 than currently expected".

According to the Reserve Bank of India’s projections, the economy could record a growth of over 8.5% in the current fiscal, up from 7.4% in the 2009-10. During the first half of 2010-11 the economy recorded a growth rate of 8.9%.

 

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