Manmad Problem

The oil mafia in Maharashtra is so powerful that even resistant petrol retailers are forced to join the adulteration racket

Sanjay Gaikwad’s petrol pump didn’t come easy. For years, the farmer from north Maharashtra pinched pennies, and when he had enough to bribe his way through, solicited the help of friends to get in touch with politicians. After negotiations, a sum changed hands and Gaikwad’s dream materialised—the lease of a pump was sanctioned to him.

Five months after Gaikwad took charge of the petrol pump, a man arrived at his pump and bluntly asked whether he wanted to join an adulteration racket. “He did not reveal his name. Just said if I was interested, I would be contacted by someone. I refused, but it didn’t surprise him. He told me in detail about the profits that adulteration would bring in,” recounts Gaikwad.

His answer was still ‘no’, and the man left. Some days later, another stranger came and made the same proposal again. This time, Gaikwad reported it to the oil company he got his supplies from. It was the honest thing to do, but since then, he has had little peace of mind. “They told me about the adulteration mafia,” he says, “They said the mafia would find different ways to steal from tankers headed to my petrol pump. It scared me.”

It still scares him. Gaikwad is caught between a rock and an oil well. For honest petrol pump owners like him, to adulterate fuel is to venture into illegal territory, to not do so is to take on an organised crime syndicate that has the police and politicians on its payroll. North and east Maharashtra are active zones of the fuel adulteration racket. The operation’s capital is the nondescript town of Manmad, near Nashik, whose only claim to fame had once been the presence of Asia’s largest grain godowns.

On 25 January, that was to change dramatically in a blaze of violence. On that day, Yeshwant Sonawane, an additional collector of the local administration, was burned alive by an adulterator called Popat Shinde—to the shock of a country just waking up to the perplexities of a partially subsidised fuel economy. According to one version, Sonawane had caught the adulterators red handed, and was killed for it. A second version, as claimed by those arrested, has Sonawane going there to demand a bribe and being set aflame as a result of a quarrel. In either case, no one disputes that the accused were part of an adulteration ring.

What makes Manmad such a hub for fuel felony is the existence of huge oil depots of Indian Oil Corporation (IOC) and Bharat Petroleum (BP). The latter even runs a multi-product pipeline from its Mumbai oil refinery to this town, which serves as a distribution node of petrol and other fuels to retailers (via tankers) in at least 12 districts in the state. “Time and again, there have been efforts to keep a check on the oil mafia by revenue officers,” says an IOC source, “They failed because political leaders and bureaucrats are paid huge sums to look the other way by the oil mafia.”

The case of Popat Shinde, who has since died of burn injuries sustained while immolating Sonawane (the officer grabbed hold of his attacker in a reflex of retributive rage), illustrates how well protected the racket is. Shinde, who began his worklife as a humble vada pav vendor, had ten cases of adulteration pending against him. The first of these was filed in 2001. By 2002, Shinde had become a racketeer bold enough to issue a threat to BD Sanap, an additional collector at the time (and municipal commissioner of Nashik now) who had seized nine tankers and cracked down on the oil mafia in the area. The officer reported the threat, but the then state government took no action.

In 2006, a subdivisional magistrate externed Shinde from Manmad for a year. But Shinde challenged his externment order by approaching the Mantralaya in Mumbai, the state secretariat. On the strength of a series of ‘good character’ certificates issued by a trio of Manmad municipal councillors and the president of the Republican Party of India (RPI), Shinde’s exile was quickly reversed by Maharashtra’s home department. Thus did he return triumphant to his ‘business’ in Manmad.

The business involves making money off mixing an expensive fuel with a cheaper one. Petrol in India retails at a far higher price than kerosene, which is subsidised by the Government for the poor and serves as a handy adulterant of petrol (‘diversion’ is the euphemism in use). Naphtha, another refinery product, is also used but it doesn’t escape detection quite as easily.

The racket thrives as a network at various levels. Tankers carrying assorted refined products are waylaid with ease in Manmad. Drivers are paid off by the oil mafia to divert their petrol-filled tankers to secluded spots off the highway, where empty tankers await them along with drums of kerosene. The mixing done, the adulterated fuel is dispatched to petrol pumps in the loop.

Petrol pump owners are approached by different agents each time. They turn up without intimation and offer a cut of profits. Owners who refuse are threatened with physical violence. Since police protection is not easily available, many owners simply give in, agreeing to fill their customers’ vehicle tanks with a mix of petrol and kerosene.

“We employ our own security, but they find a way to compromise them too. So we have to keep changing the security and tanker drivers frequently. A male member of my family always accompanies the tanker. The tanker never follows a schedule,” says Suresh, a petrol pump owner in eastern Maharashtra. “There is always a threat to the life of a petrol pump owner.”

Since Sonawane’s murder, the state has intensified checking in Nashik, Manmad, Dhule and other places in north Maharashtra. Being tested are the density of petrol and diesel at pumps across the state.

But nothing will really change, if the past is any indication.

In 1995, Leena Mehendale, then Nashik’s revenue commissioner and now retired, prepared a report on the oil adulteration racket in the state and sent it to the Maharashtra government. Nothing happened. Inquiries with the revenue department on the status of the report drew a blank.

No one seems to know what happened to that report. In the late 1990s, when the BJP-Shiv Sena government was in power in Maharashtra, the then health minister, Daulatrao Aher, who was in charge of Nashik district, had initiated raids on petrol adulteration dens. Nothing came of that either.

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