India Today - Fuel Mafia Gang Burns A Man, Yeshwant Sonawane At Malegaon

A good man was burnt to death in the state of Maharashtra because he stood in the way of illegal trafficking of kerosine (a liquid fuel used for cooking, very similar to the fuel used in jet planes). Seems like this is a $2billion illegal industry (http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOICH/2011/01/27&PageLabel=1&EntityId=Ar00100&ViewMode=HTML&GZ=T). The government subsidizes kerosine, so that poor people can buy it cheaply. 

The moment there is subsidy, we know what happens. We have a mafia in cahoots with the public distribution system, with the police. Assuming kerosine costs Rs 30/liter in the general market and it's sold at a subsidized rate of Rs 12/liter ($1=Rs45 approx), the mafia ensures that

• The subsidized kerosine (any subsidized product, kerosine in this case) is not sold to the people.
• It is sold at say Rs28/liter in the black market. This gives them a profit of Rs 16/liter with the cost at Rs12/liter. A more than 100% profit. Imagine how many 1000's of liters are involved and hence the scale of operation is $2b (as quoted by the article).
• The mafia oils the government machinery concerned to ensure that the business proceeds smoothly. Where the machinery cannot be oiled (as in the case of the Additional Collector, Yeshwant Sonawane) it is dismantled/disposed of.

Why does this happen? How do a bunch of unethical people get away with this? Why does this happen? How do we curb it? Well for one, I had mentioned earlier http://vbala99.blogspot.com/2011/01/capitalism-at-its-best.html. Just about everything can be purchased in India from kerosine to governments.

The next: whenever there is a subsidy (anything being sold at less than market price, admission given to some people because of their special status: they are poor, black, blonde etc), there will be a black market.

Coming back, what do we foresee about this man burning incident. Well nothing. So much kerosine, petrol/gasoline is burnt in this country. And in USA and in Europe and China. One man being burnt hardly makes any difference to the overall ozone layer.

And who gains by solving this problem of cracking down on the fuel mafia? There lies the answer.

And if you thought that all collectors and graduates of IAS (Indian Administrative Service) were good men, well here is something
(http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOICH/2011/01/27&PageLabel=8&EntityId=Ar00800&ViewMode=HTML&GZ=T). A husband and wife team has worked diligently to amass wealth (illegally as it's alleged).