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Sunday, May 18, 2008
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Petroleum Ministry surprised

Special Correspondent

Oil firms’ move to halt gas connections

Fears expressed that such steps can cause hoarding, artificial scarcity
Motive may be to pressure Centre to hike prices

NEW DELHI: The “unofficial” directions by Oil Marketing Companies (OMCs) to distributors in various States to “freeze” new LPG connections and curtail “disbursement” of booked LPG cylinders along with that of petrol and diesel have caught the Petroleum Ministry off guard.

Fears are being expressed that this would lead to hoarding and artificial shortage, benefiting middlemen and unscrupulous elements. The OMCs have petitioned the Ministry to impose an immediate ban on release of new LPG connections, limit the quota of LPG cylinders for households and curtail supply of diesel and petrol products in metro cities and push premium brand fuels. They have “orally and unofficially” asked the distributors countrywide to implement these measures.

Ministry bypassed

Official sources said these decisions could lead to “hoarding” of petroleum commodities that fall under the ambit of the “Essential Commodities Act.”

“Surprisingly, it is the OMCs which are patronising hoarding and creating artificial shortage by such reckless decisions.

The government has not taken any decision on the issue and these actions are being undertaken on the ‘unofficial advice’ of heads of OMCs who have bypassed the Petroleum Ministry on the issue,” a senior Ministry official remarked.

“There is also talk of curtailing import of diesel and LPG along with reducing the supply of diesel in rural parts of the country. This could adversely impact farmers in the sowing season and lead to black marketing and sale of adulterated products,” the sources said.

Although officials said no sanction had been given for such orders, it is believed that a section of the bureaucracy in the Petroleum Ministry has decided to side with the OMCs on this issue. The idea is to put pressure on the Central Government for issuing enhanced oil bonds and raising the price of petroleum products to reduce the massive losses being incurred by the OMCs.

PTI reports:

BJP spokesperson Ravi Shankar Prasad criticised the reported move to ‘freeze’ new LPG connections and fix quota for the existing customers. He wondered whether such news was being ‘leaked deliberately’ to encourage hoarding.

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