A Parliamentary committee on Friday asked the government to stop the import of kerosene by private sector retailers as the imported fuel is being used for adulteration of diesel.
"In view of the fact that indigenous production of kerosene matches with the demand, the government should seriously consider stopping the import of kerosene," standing committee on petroleum and chemicals said in its report on 'Parallel marketing in petroleum products'.
The report, which was tabled in Parliament on Friday, stated, "Imported kerosene is not only being used for the purpose for which it is meant, but is also substantially being diverted for adulteration in diesel and also being substituted as transportation and power generating fuel."
During 2003-04, the indigenous kerosene production is projected to be higher than the demand.
The use of imported kerosene, which is cheaper than diesel by Rs 5 a litre, as adulterant has been the prime reason for 5.6 per cent drop in sales of diesel despite good monsoon and revival of economic activity.
The committee criticised the government decision to reduce customs duty on kerosene import from 35 to 20 per cent.
It recommended that the import duty on kerosene import be restored to 35 per cent.
The customs duty on indigenously produced diesel is 20 per cent and for kerosene, it is 10 per cent. Besides this, there is a road cess of Re 1 per litre on diesel sales whereas kerosene is left out of this cess.
"The delivery price of diesel thus goes up in comparison to kerosene's price," it added.
