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An oil scam

Print edition : Mar 11, 2011 T+T-

Another scam, this one also involving a brutal killing, grabs the headlines in Maharashtra.

in Mumbai

A FEW months after the Adarsh building controversy rocked Maharashtra, another story of fraud has grabbed the headlines in the State. It involves the gruesome murder of a State government official and the uncovering of the operations of an oil mafia. Though a crackdown on oil depots has been ordered and an investigation into the killing and the racket has begun, the ordinary citizen feels that corruption has become all pervasive.

The scam also brings into the limelight the larger issue of fuel availability to the poor man. Those involved in the racket would siphon off kerosene allotted for the public distribution system (PDS), adulterate it and sell it in the black market. The poorer sections, who use kerosene as cooking fuel, are compelled to buy it from these racketeers at prices which are well above PDS rates.

Jolted by the murder of the government official Yashwant Sonawane, who attempted to blow the whistle on the theft the Centre announced a new system that it hopes will curb the oil thieving. A hidden chemical in kerosene will show up when the oil is adulterated. A seven-page order has been issued already. The government plans to reintroduce the market system. Licences and stocks of dealers will be under constant surveillance. Gazetted officers and the police will be empowered to conduct raids and checks.

Yashwant Sonawane, Additional Collector of Malegaon, was driving by a kerosene depot at Manmad near Malegaon in Nashik district on January 25 when he saw some men pilfering oil from the tankers parked at the depot. An attendant reportedly alerted Popat Shinde, said to be the leader of the gang. Sonawane's car was intercepted shortly afterwards. Kerosene was poured over him and he was burnt alive.

During the scuffle, Sonawane, say the police, grabbed Shinde and pulled him into the flames. While Sonawane's body was found charred beyond recognition, Shinde was found with 80 per cent burns and was rushed to hospital. Shinde died on January 31.

The outrageous killing caused an uproar in the State. It exposed a terrible rot in the PDS, says Vivek Montiero of the Centre of Indian Trade Unions (CITU). This racket operates throughout the country. You may recall the killing of an Indian Oil official in Uttar Pradesh when he exposed the adulteration racket a few years ago. In spite of the crackdown, it will be hard to dismantle the apparatus, says Monteiro.

Activists say that such a racket can thrive only if a nexus exists between the thieves and the officials. The racket must have been operating for years. It is only the very public death of Sonawane that has stirred the administration into cracking down on it, they say.

Following the incident, close to 80,000 government officials went on a cease-work protest. The opposition parties have asked for an inquiry by the Central Bureau of Investigation. The police, meanwhile, arrested close to a dozen people. Home Minister R.R. Patil issued orders to crack down on all oil depots in Maharashtra. The police raided 200 places and arrested 180 people, according to their reports.

There is more than meets the eye in the Sonawane incident, says a police officer investigating the case. An official government car was a conspicuous sight in the districts and it would not be that easy to torch it, the officer said, adding: Something was going on between Sonawane and Shinde.

Indeed, when Shinde died his family accused Sonawane of having taken bribes from him. They said Sonawane threatened to expose Shinde because the latter was not paying Sonawane his hafta (bribe).

Speaking to the media a day after her father died, Shinde's daughter Jaya Borse said: It's true that my father had been in the oil business for over a decade. But, my father's business was being supported by Sonawane and several officers who were paid on a monthly basis.

However, officials who knew Sonawane told Frontline that the Additional Collector was a clean officer and he paid the price for coming in the way of Shinde's business.

Police sources say Sonawane had been putting together a dossier of proof on Shinde's illegal activities. Apparently, his staff had seized 4,000 litres of kerosene and 3,000 litres of petrol from Shinde's dhaba (roadside eatery) in Panewadi village Manmad. Sonawane had suggested that the police seal the oil found and take action against Shinde under the Essential Sevices Maintenance Act (ESMA). A report had been filed by Sonawane on this, but no action was taken.

A look at Shinde's antecedents suggests that the State government had ignored reports of his illegal business. Six first information reports (FIRs) and one externment order were registered against Shinde between 2006 and 2010. But nothing was done and he continued to run his business.

Maharashtra is one of the few States that have several oil depots. Manmad is located at an intersection of four highways and is a convenient spot for oil depots. So this belt hosts two of the largest oil depots in the country. While there is no clear picture on the extent of the pilferage that takes place, informed sources say the value of pilfered fuel would amount to nearly Rs.5,000 crore annually.

Reportedly, the oil theft in Manmad takes place openly. Each depot gets a certain amount of kerosene for the PDS. Filled up tankers are met at predetermined isolated spots on the highway and the pilfering gangs make off with vast amounts of oil. The tanker drivers, obviously, are in cahoots with the thieves. Every day, 300 tankers are filled at the depots, and so a fair quantity is stolen every day. The stolen kerosene is not just adulterated and sold for a premium: a large portion of it is used for adulterating petrol and diesel as well, say the sources.

Manjunath Shanmugam, an Indian Institute of Management (IIM) graduate, paid with his life for trying to expose the corruption in petrol marketing. Satyendra Dubey was killed in Gaya, Bihar, for fighting corruption in the Golden Quadrilateral highway project. Sonawane is another victim of corruption. Their deaths only caused some protests and little else. Rackets continue to flourish.