Amitav Ranjan
The Indian Express
August 2, 2013
The recent bump in traditionally smooth ties between India and Bhutan has escalated into a war of words between the petroleum and external affairs ministries, with the former blaming the foreign office for issuing an explicit directive that led to a cut in the subsidy on kerosene and cooking gas sold to the Himalayan kingdom. But the MEA has said that the petroleum ministry had misinterpreted its communication and jumped the gun on cutting the subsidy.
“The communication received from MEA (on May 23) was very clear and there was no scope for ambiguity,” says a petroleum ministry letter of July 31 to the MEA.
“The communication clearly stated that the supply arrangements for all petroleum products, including kerosene and LPG, to Bhutan should be revised to ensure that these take place on commercial, self-sustaining basis and does not involve any subsidy from the MEA,” says the office memorandum quoting the MEA’s May 23 letter.
Responding to the directive, state-run Indian Oil Corp implemented commercial rates for kerosene and LPG from July 1. The move came ahead of the second round of voting in Bhutan’s parliamentary polls and snowballed into a diplomatic incident, with some analysts seeing it as New Delhi punishing the then Druk Phuensum Tshogpa (DPT) government in Thimpu for apparently cosying up to Beijing.
With the rival People’s Democratic Party winning the elections, analysts claimed India had successfully translated high LPG and kerosene prices into a poll issue by adding to the charges of economic mismanagement by the DPT’s Jigme Thinley during his five years as Bhutan’s first elected prime minister.
However, the MEA tried to wash its hands of the episode by blaming the petroleum ministry for misinterpreting its request for a “review” of subsidies as one for revision and jumping the gun on issuing orders to IOC.
The blame-game cropped up at a meeting on July 19, chaired by the then foreign secretary Ranjan Mathai, and the petroleum ministry stood its ground saying the directions to cut the subsidy had come from the MEA and had Mathai’s approval.
The MEA responded a day later saying the subsidy cut should have been effected with its consultation. The strong response by the Petroleum Ministry on July 31 asked the MEA to be more explicit in the future.
“In order to avoid any misunderstanding in future, it is requested that MEA in its communication, may kindly indicate clearly what their intentions are,” said the office memorandum from the petroleum ministry. It also said that the subsidy was being restored from August 1 following a July 25 MEA directive.
MEA officials said the decision to revise the supply price to Bhutan was taken without consulting External Affairs Minister Salman Khurshid. They said it was a follow-up of a June 16 advisory from the ministry’s northern division which cited a “lack of transparency and openness”on the part of Bhutan and advocated that India should “demonstrate seriousness through some concrete expression of displeasure”.
