KOCHI: Offshore diesel bunkering for fishing boats seems to be a long way off, though the Marine Products Exports Development Authority (MPEDA) is currently working on the feasibility aspect on the directive of Union Minister of State for Commerce Jairam Ramesh.

The Minister, who had been here last week, asked the MPEDA to study if diesel bunkering— supplying duty-free fuel to fishing boats away from the shore from a barge or some other vessel— is feasible. Asked about the study, an MPEDA official said: "We are working on the project."

Central and State agencies doubt the project will materialise in the near future as it requires the coordinated efforts and consent of several authorities. But, more important, the State Government is said to frown upon the idea as it would lose crores of rupees by way of sales tax and other revenues as it views offshore bunkering will be diesel subsidy by another name. Diesel bunkering has been a long-standing demand of boat owners and workers. More than the convenience of getting their boats refuelled mid-sea, it is the prospect of substantial tax advantage that has excited the fishing community. More than a fifth of the diesel price goes to the Government by way of sales tax alone.

Marine fishing in Kerala is mostly motorised or mechanised. Roughly 90 per cent of the fish comes from such boats and hence diesel cost is a key input cost. Waiving sales tax on diesel supplied to such a huge segment of oil consumers would mean a deep erosion in the State's revenues and hence the reluctance on its part to the bunkering idea.

A senior official in a public-sector oil company said it was this reluctance to forego the tax revenue that was holding up the proposal to set up an international bunkering terminal off the Kochi shore. He said his company had not been told by any Government of any plan to offer bunkering facility for fish boats. Sources said that one major problem in getting the bunkering project off the ground was that several Union Ministries— like Commerce, Food, Agriculture and Petroleum— and the agencies working under them needed to be involved. Of course, the State Government will be the key factor. Kerala-based agencies involved in marine products feel that bunkering would help the fishing sector because, currently, the input costs are very high and bunkering would reduce the cost by bringing diesel price by a fifth.

Another major problem is to find a fool-proof modus operandi of supplying diesel. Officials said the fishing boats might misuse the facility, at the cost of Government revenue. Since the price differential was substantial, they said, the duty-free diesel might leak into the black market.

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