Kerosene subsidy lifted for industrial establishments

About 17 industries in Phuentsholing and Samdrupjongkhar will not get kerosene subsidy from January next year

Trade: Commercial industries in Phuentsholing and Samdrupkongkhar will not be entitled to the current 50 percent subsidy on kerosene starting January 2016.

The trade department has notified to discontinue the issuance of subsidised kerosene to all existing business entities that currently enjoy subsidy.

In all, about 17 establishments will not be entitled the existing subsidy from next year. Phuentsholing has 10 small establishments, while there are seven in Samdrupjongkhar that will be denied the subsidy.

Trade officials in Thimphu said the decision was made in accordance to the findings of the special audit that the Royal Audit Authority(RAA) conducted.

The notice was also issued after the audit report revealed that the government had lost Nu 207.45 million between 2008 and 2013 by approving subsidised kerosene to commercial industries across the country.  The supply of kerosene at subsidised rate to business units not only deprive the intended Bhutanese citizens but is also against the vision of the Government of Bhutan and the Government of India for instituting the subsidy to benefit people of Bhutan, the report had stated.

The remaining months until January next year has been provided to the industrial entities to prepare.

Druk Plaster and Chemicals Limited (DPCL), Barma Chemical Industry (BCI), and Bhutan Gypsum Product (BGP) in Samdrupjongkhar are the top three consumers of subsidised kerosene as per the audit report findings of 2014.

These commercial industrial entities put together are entitled to about 108,000 liters of kerosene a month today.

In Phuentsholing, Sangay Noodles is allowed the maximum volume of the fuel at 1,500 litres a month.

It has been learnt that some entities in Samdrupjongkhar have written to the trade office requesting it to continue providing them kerosene at the subsidised rate stating that lifting the subsidy would render their business unviable and would eventually lead to closure of business.

The letter they submitted has pointed out that the economy in general would fall compounding the unemployment issue and revenue loss in tax.

According to the business entities, the figures projected in last year’s audit findings of the three entities in Samdrupjongkhar, which consume more kerosene than others are incorrect.

As per the RAA report, 2014, Nu 90.53M (million)worth of kerosene quota was approved for DPCL from 2008 to 2013. However, its actual consumption was of fuel worth Nu 60.46M, according to figures shared with Kuensel.

This could mean, about Nu 30Mwas excessively reflected but officials refused to comment further.

Figures with BCI and BGP also show similar cases of incorrect projection of quota approved between the same periods. Between 2008 and 2013, these three companies have earned more than Nu 400M in INR.

Rajesh Rai, Phuentsholing

1 reply

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply