PM rejects 'shut petrol pumps at 8 pm' proposal

Decision would have affected at least 2.5 lakh jobs in the sector

Prime Minister Manmohan Singh has rejected the petroleum ministry’s proposal to shut down petrol pumps at night. Had the proposal been accepted, it would have affected at least 250,000 jobs, estimates show.

According to estimates by the Federation of All India Petroleum Traders, night sales contribute to more than 30 per cent of sales in urban areas, while it crosses the 60-per cent mark near highways. There are about 42,000 outlets in the country. The move, reportedly mooted by Petroleum Minister M Veerappa Moily, was aimed at reducing fuel demand.

However, the minister on Monday denied such an intent. “There is no plan or proposal by the ministry to shut down petrol pumps at night. If there was no proposal, how can the PMO reject? I will not allow any petrol pump in the country to go dry,” Moily said.

ART OF MOILISIM

Petroleum Minister Veerappa Moily has a history of being associated with statements that have raised eyebrows. In some cases, he had denied issuing such statements

• The minister had, in June, kicked off a controversy by saying every petroleum minister was “threatened” by import lobbies, which were not in favour of an increase in gas price. It surprised several people as such imports are largely done by public sector undertakings
• Soon after increasing gas price, the minister told journalists that by next year, the price of natural gas would be $8.4 per million British thermal units. Confusion reigned over how the figure was arrived at. Later, Moily said it was “misquoted” and $8.4 per mmBtu was never in the picture. However, later reports suggested that the figure was indeed mentioned in a Cabinet note on gas pricing
• In August, the ministry reallocated the charge of a joint secretary handling gas pricing. CPI leader Gurudas Dasgupta wrote to the PM saying this was happening due to the official’s “strong stance against Reliance Industries.” Within hours of the reallocation, Moily issued an order allowing the official to retain the portfolio
• Now, Moily has denied saying petrol pumps should be closed at night in Bangalore. “I never mentioned that,” the minister clarified

Ajay Bansal, general secretary, Federation of All India Petroleum Traders, said: “This would have led to a massive cutdown in the number of jobs. We have an average 20 employees per pump working on various shifts. The move might affect our margins, which would lead to job cuts of an average five to six employees per pump.”

Although the ministry has clarified that this was just a suggestion and is unlikely to be applicable, the idea has caused jitters across the sector.

A senior executive of an oil marketing company said: “This is not going to be a viable solution to cut down on consumption. Instead of curbs on timing, making retail the diesel price market-related would automatically push consumption down and also take under recoveries to nil and there would be no subsidy on diesel thereafter. In one stroke, all three can be achieved.”

In a letter to Singh and Finance Minister P Chidambaram, Moily said he wanted to lower forex outflow by $7 billion through reduction in imports, conservation efforts, reduction in liquefied petroleum gas demand and the ethanol-blending programme — another $8.47 billion through rupee payments for imports from Iran.

Also, an inflow of $3.75 billion is expected through external commercial borrowings by oil companies during the financial year.

 

He also raised concerns over the increasing threat of under-recovery. “If we consider the average price of the Indian crude oil basket at $110 a barrel and the average exchange rate at Rs 66 for a dollar over the rest of the financial year, the under-recovery of OMCs would increase to Rs 1.68 lakh crore. If international prices increase to $115 a barrel, the under-recovery would reach around Rs 1.81 lakh crore,” Moily warned in his letter to the prime minister.