Petrol and politics

Print edition : November 05, 2004

A Supreme Court-appointed committee recommends the cancellation of 297 "improper" allotments of petrol pumps made by the National Democratic Alliance government.

in New Delhi

THE petrol pump scam is one hot potato that refuses to get dropped, much to the chagrin of several politicians in the Bharatiya Janata Party (BJP), the Congress and some of their allies.

Former Petroleum Minister Ram Naik at a function at a petrol pump in Mumbai in 2001.-VIVEK BENDRE

Following the recommendations of the Supreme Court-appointed probe panel, the court is likely to cancel 297 of the 409 allotments, for being "improper". This includes the names of top political leaders and their relatives.

Although each of the "improper" allotments will be given a chance to challenge the committee's findings on the issue of guidelines and procedures, the court has made it clear that it will not listen to any arguments on the question of facts.

The Congress members, too, were somewhat sobered following reports that their own people (as well as relatives of those belonging to the constituents of the United Progressive Alliance) have been beneficiaries of the government's largesse.

When the question of improper allotments was directed at Girija Vyas, she told Frontline: "Every individual has the right to apply, the right to state our facts, and make arrangements for means to earn an income. All of us have the right to try. The rest is up to the judiciary. The final decision will be taken by the Judges."

While the Congress has stated that the committee's report is a vindication of its own stand - that the former NDA government had been making improper allotments - it is not very vocal on the issue. There were also reports that the Congress would insist on a probe into cooking gas allotments. A Congress spokesperson said: "This panel has covered all allotments, including cooking gas. There is no need to insist on a fresh probe."

THE petrol pump scam, as it came to be known, was brought to light by the Indian Express on July 31, 2002. The report revealed that more than half the petrol pump, liquid petroleum gas (LPG) and kerosene allotments made during the National Democratic Alliance (NDA) regime had favoured BJP functionaries, or those allied to the Sangh Parivaar. Of course, other parties like the Congress, a couple of Governors and some bureaucrats were also among the beneficiaries. But the largest slice of the petrol pie went to either BJP party workers or their friends and relatives.

Almost immediately, the mud-slinging began, with the issue rocking both Houses of Parliament for several days. While the Congress and its allies, who were in Opposition at the time, demanded the resignation of Petroleum Minister Ram Naik, the latter swore to dig up the dirt on similar irregular allotments made in earlier years, when the Congress was in power.

At first, the NDA government offered a limited Central Bureau of Investigation probe. But the uproar continued in Parliament and eventually, a Parliamentary Committee was set up, headed by Mulayam Singh Yadav. Meanwhile, Prime Minister Atal Bihari Vajpayee issued an order cancelling all 3,158 allotments, with effect from January 2000. The parliamentary committee recommended that the cancelled allotments be auctioned.

However, the Supreme Court almost immediately quashed the government order, saying it was an attempt to cover up. The government had submitted a list of cases to be investigated in court, but none of these was among those listed by the Indian Express as involving political favouritism. The Supreme Court probed further and asked for fresh lists, referring to the media reports.

Eventually, a high-level committee, comprising retired Judges S.K. Agarwal and P.K. Bahri, was set up by the apex court to probe the allotments. The committee submitted a 21-volume report recently, and also recommended the cancellation of 297 allotments that had been made for political considerations.

THE new Minister for Petroleum and Natural Gas, Mani Shankar Aiyar, has been refusing to comment since the case is still being argued, and the Supreme Court is yet to pass a final judgment.

Ram Naik also refused to comment on the judgment. He told Frontline that he has asked for the committee's report. "It is a 21-volume report and it will take a lot of time to study. I am waiting to get the official version of the Supreme Court's statement. Only then I will respond. Plus, the court has given the defendants eight weeks to reply and defend their allotments," he said.

Incidentally, Ram Naik's name has also appeared more than once in the list, as his friends, supporters or relatives have been beneficiaries of the allotments.

The cancellation of the allotments is not going to be the end of the matter. Since August 2002, all the political players involved have been busy with the blame game. While the Congress has been demanding new probes into the cooking gas allotments during the NDA government's rule, the BJP is now demanding that the Supreme Court investigate all petrol pump allotments made during earlier years, when the Congress was in power.

According to sources in the Petroleum and Natural Gas Ministry, the former governments laid the blame on the chairmen of the Dealer Selection Boards (DSBs). One official said: "The DSBs consisted of two public representatives and one member of the judiciary, usually a retired Sessions or High Court Judge. The public representatives were mostly political appointees and they often ganged up against the chairman, who was the Judge. As a result, the pressure to select an allottee for political reasons was very high."

However, the Ministry official added that the decision to scrap the system had been taken before the scam came to light. He said: "The decision to scrap the boards was taken in May 2002, as part of the reforms. Now that the sector has been deregulated, it is left to the oil companies to make all the decisions, based on broad outlines provided by the government. But now, the oil companies will have to individually advertise to call for applications. They will examine, evaluate, interview and select the allottees. They will decide where, if at all, a pump is to be set up. The government has almost no role."

Ram Naik claims credit for having introduced the new system. He said: "The current system was something I put in place. When I was Minister, I formulated the guidelines that the oil companies would follow. Since it was decided to deregulate the sector, the oil companies are authorised to take a decision themselves."

However, what he does not mention is that when he introduced the system, he had also arranged for all applications to come in through the State BJP office.

Ministry officials believe that the new safeguards that have been introduced - the broadening of the guidelines and the decision to leave allotments to the oil companies - will lead to a more streamlined system.

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