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Oil marketing companies want to use Aadhaar cards for LPG supply

NEW DELHI: State-owned oil marketing companies Indian Oil CorporationBSE -0.55 %,Bharat Petroleum CorporationBSE 0.94 % andHindustan Petroleum Corporation Limitedhave urged the Supreme Court to allow them to use Aadhaar cards to restrict LPG subsidies to those entitled to it on the grounds that they are facing "severe under-recoveries". 

The companies on Monday claimed that the court's order directing them to stop using the Aadhaar cards to plug subsidy leaks would immediately bring to a halt the direct cash transfer scheme being introduced across 97 districts in the country. 

Under the scheme, all LPG consumers need to buy cylinders at the market price and those entitled to subsidy will get the amount credited to their Aadhaar-linked bank accounts. The three companies claimed that this will reduce the extent to which domestic LPG is diverted to commercial use and plug substantial leaks in the subsidies, which amounted to Rs 39,558 crore in 2012-13, Rs 29,997 crore in 2011-12 and Rs 21,772 crore in 2010-11. 

"The September 23 order has seriously prejudiced the effective and efficient implementation of Direct Benefit Transfer for LPG Scheme (DBTL). The order has created serious doubts and confusion and uncertainty in the minds of several crores of residents who have already enrolled for Aadhaar," the companies said in their plea filed through Meharia and Company. 

The uncertainty will force them to revert to the old system in the 54 districts where the scheme has already been implemented, the companies claimed, adding that continuing both schemes would lead to extreme confusion, cost overruns and wastage of resources. 

The companies urged the court to clarify its order that no consumer would be denied domestic LPG cylinders at market rates, whether or not the consumer held an Aadhaar card, but if a consumer wanted to avail benefit of subsidy, he or she should hold an Aadhaar card. 

In its September 23 order, the court had said, "...no person should suffer for not getting the Aadhaar card in spite of the fact that some authority had issued a circular making it mandatory and when any person applies to get the Aadhaar card voluntarily, it may be checked whether that person is entitled for it under the law and it should not be given to any illegal immigrant." 

The companies said the decision to phase out subsidies was taken after an expert committee recommended it. They also claimed that the sale of domestic LPG in 20 districts had gone down by 7.73 lakh cylinders from June to August, compared with the year-ago period, after the implementation of the scheme. 

The sale of commercial LPG has gone up by 0.97 lakh cylinders during this period, the companies said. About 45,000 multiple connections have been detected and Rs 24 crore can be saved once these are blocked, the companies told the court. 

Supreme Court to hear government plea after October 16 

The Supreme Court on Tuesday refused to modify for now its September 23, 2013 order asking the government not to make Aadhaar cards mandatory for availing any subsidies, brushing aside a warning that the order would bring the newly-introduced cash subsidy for LPG consumers to a grinding halt. 

A bench, comprising Justices BS Chauhan and SA Bobde, said that it would hear the government plea to allow it to use Aadhaar cards to give LPG subsidies after the court's Dussehra break (from October 9 to 16). The top court brushed aside suggestions by Attorney General GE Vahanvati that the order would create "problems for thousands of people". 

"The 
Ministry of Petroleum and Natural Gas distributes LPG cylinders at highly subsidised rates. Aadhar is a full-proof method of preventing misuse of these subsidies as it cannot be duplicated. A voter I-card or ration can be duplicated," Vahanvati said. "People may not get subsidised cylinders. If we go back to the old system, distribution may come to a grinding halt," he warned. 

He tried to point out that the issue may be placed before the Cabinet, only to have the bench take a dig at him saying: "You also have the Ordinance route." The judges said insisting that Aadhaar cards would be a condition of supply was a "double-edged weapon". "Essential supplies can't be deprived," Justice Bobde said. 

Oil marketing companies also raised objections to the order saying it would worsen their financial plight, but the court said it would hear the issue at length after the break.