Petrol pump chip scam: Delhi based gang under radar, states asked to inspect fuel outlets

NEW DELHI: The petrol pump chip scam could extend beyond Lucknow, with the Uttar Pradesh police suspecting that the mastermind of the racket is a New Delhi-based gang that’s been around for over five years. The roles of the UP Weights & Measures Department and state-owned oil companies are also in the spotlight.

All states have been advised to conduct surprise inspections at petrol pumps and check for the chips, which cut the outflow of fuel by as much as 10%, petroleum minister Dharmendra Pradhan said in New Delhi on Monday.

Delhi chief minister Arvind Kejriwal too ordered surprise inspections at petrol pumps, saying any outlet involved in cheating customers would be sealed. There are 54,000 filling stations operated by state-owned companies across the country.


A top official in the UP Special Task Force probing the matter told ET the mastermind of the scam is a New Delhi-based gang and the STF is hunting for the members.

“More disclosures may emerge once they are nabbed. Right now, we have nabbed the man who put these chips in Lucknow, named Rajendra. He learnt the trick from the Delhi-based gang over five years ago,” the STF official told ET. He said while there is no conclusive material to show that pumps in the national capital are rigged, other states must conduct immediate checks.

The official said they now had information that fuel pump owners are desperate to remove the chips from their machines. The “pulse/frequency enhancer” device costs about Rs 50,000 but brings in extra profit to the tune of Rs 12-15 lakh for an average fuel pump every month, the official said. Consumers had no way of knowing they had been shortchanged because the electronic display would show the correct measure of fuel. The UP Weights & Measures Department, which seals the dispensing units, is in the eye of the scam.

Senior STF officials said the chips were planted in the dispensing machines after pump owners falsely claimed the units had broken down. The Weights & Measures Department was then called in to seal the machines.

“A chip can’t be placed (in the dispensing unit) without the knowledge of the local weight and measures department. (The dispensing units) are sealed once a year after supervision. So the seal will have to be broken to insert a chip – this is the fundamental issue,” Pradhan said. The task force has asked the Weights & Measures Department not to attend to any requests to seal any purportedly broken down machines.

“We have information that many pump owners want to get rid of the chip now. But the chip cannot be taken out of the machine by any pump unless the seal is broken. The Weights & Measures Department has been told to inform police if they get such request. Any pumps found with broken/tampered seals will be acted against,” the STF official said.

The UP police sent a chip seized during raids in the state for forensic examination. The involvement of state oil companies hasn’t been ruled out, investigators said. The state police has sought yearly fuel supply and sale records of pumps in UP from oil marketing companies.

“This is because the raided petrol pumps had far more fuel in their stock than they should have had as per their sales. This was to the tune of 500-700 litres at each pump. It shows this much fuel was being shaved off from consumers,” the official said.

Pradhan said oil marketing companies had no role in sealing the fuel dispensing units, which was done by the state weight & measures department.

“But oil marketing companies can’t run away from their responsibility since they are also supposed to monitor petrol pumps,” Pradhan said, saying disciplinary action has been initiated against two marketing executives, one each of Indian Oil and Bharat Petroleum.