PDS kerosene worth Rs 19.56 crore diverted in Nagaland, finds CAG

Morung Express News
Dimapur | September 18

The Government of Nagaland (GoN) violated the Government of India (GoI) directives and diverted Superior Kerosene Oil (SKO) worth Rs 19.56 crore or 6113.19 kilo litre (KL) to open market other than the targeted beneficiaries under the Public Distribution System (PDS), according to the Comptroller and Auditor General (CAG) of India.

The conclusion is based on examination of central as well as GoN’s data, informed the CAG report on ‘Social, Economic, General and Revenue Sectors’ Government of Nagaland for the year ended 31 March 2022. The report was tabled in the State Assembly on September 14. 

As per the CAG, the Union Ministry of Petroleum & Natural Gas (MoPNG) allocates SKO for distribution under the PDS to States and Union Territories (UTs) on quarterly basis.

The entire allocation is to be lifted within the quarter itself as carry-forward is not allowed except in case of exigencies, such as natural calamities.

The quantity is further based on electricity and Liquefied Petroleum Gas (LPG) penetration was well as historical allocations in each State or UT and the PDS is the sole distribution network.

Under allotment orders directives of the GoI,  the subsidised kerosene is meant only for targeted beneficiaries under PDS, not to be diverted elsewhere, the CAG said. 

The sub-allocation orders by GoN also stipulated that the District Food and Civil Supplies (F&CS) offices furnish monthly Utilisation Certificates (UCs) to the Director, F&CS.

The State’s SKO quota are lifted from Indian Oil Corporation Limited (IOCL) depots located in Assam and Nagaland.
The CAG examination of records of the F&CS Directorate Dimapur in August 2021 showed that MoPNG allocated 17,892 KL95 SKO to the State during 2019-21. 

Against this, the Department reported in August 2022 that it lifted 13,752 KL SKO from IOCL during 2019-21. 

However, the CAG’s cross verification of the total lifting data by the Department with the Indian Petroleum & Natural Gas Statistics (2019-21) as well IOCL’s data in July 2022 showed that State Government lifted 17,367 KL (97.07%) of SKO, resulting in short lifting of 525 KL during 2019-21..

The Department, therefore, understated the SKO lifted from IOCL by 3615 KL (17,367 KL - 13,752 KL), it said. 

Meanwhile, the GoN had issued (April 2019-January 2021) district-wise sub-allocation orders for 12,276 KL out of 17,892 KL SKO allocated by MoPNG, for distribution through FPSs in coordination with the concerned district administration.

Against 12,276 KL SKO allocated, the CAG observed that concerned District F&CS offices reported actual receipt of 11,253.81 KL from the SKO dealers and utilisation of 11,233.79 KL SKO (99.82%).

Accordingly, examination of the records showed that 6,113.19 KL SKO lifted from IOCL were diverted by the State for distribution/utilisation outside the PDS in contravention allotment orders issued by GoI, the CAG said. 

The diverted quantity of 6,113.19 KL of SKO involved subsidy worth Rs 19.56 crore, it added. 

Further scrutiny of records showed that GoN had allotted 4974 KL SKO to 51 individuals/ distributors while no records were available for the remaining quantity (1139.19 KL).

With regard to submission of UCs, the Audit also noticed that the District F&CS offices submitted UCs only for the quantity distributed through the PDS.

In absence of UCs and distribution records, the possibility of diversion of 6,113.19 KL of SKO involving subsidy of Rs 19.56 crore to open market or adulteration of petrol/diesel cannot be ruled out, the CAG noted. 

As per the CAG, when the discrepancies were pointed out, the GoN accepted in September 2022 that 17,367 KL of SKO was lifted by the State. Out of 12,276 KL allotted for ration cardholders, 11,253.81 KL was lifted; UCs for 11,233.79 KL was furnished. It was further added that a quantity of 4,974 KL was allocated to individuals.

“Thus, the State Government violated GoI directives and diverted SKO to open market other than the targeted beneficiaries under PDS,” the CAG concluded. 

To this end, the CAG recommended the State Government to strengthen and enforce monitoring mechanism effectively at various levels to ensure accountability in implementation of the scheme.

It further called for fixing responsibility on the officials concerned for diversion of the SKO meant only for distribution to beneficiaries covered under PDS.