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Tuesday, May 5, 1998

Oil prices fluctuate with politics

Rajesh Moudgil  
VADODARA, May 4: Edible oil prices have never been delinked too long from the political fortunes of the State. But the varying, often contradictory, policies of the past and present governments have caused prices to rocket to unprecedented heights.

First, it was Jaspal Singh, in his avatar as the Civil Supplies Minister in the first Keshubhai Patel government, who banned inter-state movement of oil on the grounds that this was causing prices to rise. Soon afterwards, Shankersinh Vaghela lifted the ban, claiming it was the reason why oil was being smuggled out of Gujarat.

Returned to power, Singh has re-imposed the ban. Predictably, Vaghela has gone on the offensive, alleging that vested interests were behind the move and citing the rising prices to substantiate his charges of smuggling.

The seizing of edible oil worth Rs 11 lakhs at the Bhilad check-post, in Valsad, on the Gujarat-Maharashtra border, is no occasion for celebration, simply because it points to the magnitude of the problem. Civil supplies ministry sources admit that an ineffective and under-equipped machinery -- the Valsad district supplies office has only one vehicle and a handful of officials -- can do little to combat the practice.

Around the end of 1997, loose groundnut oil was available at Rs 300 for 10 kg. Today, the retail price for 10 kg has climbed to Rs 650. According to the BJP government, the reasons are the bad winter crop and the Vaghela government's export-friendly policy, which has depleted stocks.

But though the new government has reversed the policy, the prices, curiously, remain stagnant. Though they may fall slightly after the June crop is harvested, the good times may not last long since the summer crop usually cannot be stored to last through the year. So that pushes back expectations of reasonable prices till after the next winter crop.

Meanwhile, smuggling will continue to be a constant. More than 1.5 lakh vehicles use the Valsad highways to move into Maharashtra every day; during the days of free export, 700 to 1,000 tankers of edible oil crossed the border every day. The Valsad collectorate, though on alert, has little chance of cracking down on illegal transporters of edible oil.

The Surat district route to Maharashtra, too, lies through backward tribal terrain, where it is extremely difficult -- if not impossible -- to track down illegal tankers.

The reason why smugglers prefer Maharashtra as a market for their goods is that the neighbouring State does not produce enough groundnuts to meet its needs. Each tanker of oil from Gujarat, therefore, can command a premium of any amount between Rs 25,000 to Rs 50,000.

Civil Supplies Minister Jaspal Singh, when contacted, gave details of the ban, but parried questions on the rampant smuggling and the high prices.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.



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