Adulterated fuel scams costing India $6.5 billion a year

At a kiosk on the Trichy-Tanjore highway, one of southern India’s main trucking routes, drivers lined up to buy bottles of water filled with green liquid. The bottles contain diesel or petrol diluted with paraffin, which kiosks sell for 10% less than petrol stations. Fuel adulterated with paraffin, which is subsidized to provide low-cost cooking fuel for the poor, is choking India’s cities and costing the government US$6.5 billion a year in wasted subsidies and lost taxes, says Mysore-based consultant Bhamy Shenoy. In the year to March, India spent US$19 billion to subsidize fuel, including US$4.8 billion on paraffin, the oil ministry said. “Adulteration is rampant, and oil companies will have to be held responsible,” says Anumita Roychowdhury of the New Delhi-based Centre for Science and Environment. (May 9, 2008)