The Kerala High Court on Friday orally expressed concern over the frequent hike in petrol price.

A Division Bench comprising acting Chief Justice C.N. Ramachandran Nair and Justice P.S .Gopinathan made the observation while admitting a public interest litigation petition filed by Kerala Congress chairman P.C. Thomas, seeking a directive to the oil marketing companies (OMCs) to roll back the increase, and to the Centre not to deregulate the prices of other petroleum products.

The court orally observed that the Central and State governments could not “wash their hands of” the issue. Counsel for them opposed the petition, saying Mr. Thomas' was not a public interest petition but a politically motivated one. However, the court pointed out that the public interest was involved in politics.

The Bench directed the Centre, the State government and the Indian Oil Corporation to file affidavits in one month in response to the averments in the petition. It directed the IOC to furnish its balance sheets for the three previous financial years and the current year's quarterly balance sheets, and also details of the method of calculating under recoveries, if any, along with the affidavit.

No consumer resistance

The court orally pointed out that it was two-wheeler riders and small car owners who were badly hit by the frequent hike in fuel price. In fact, the affluent sections were not affected as they drove premium diesel cars. The small car owners constituted a major chunk of the car market. The Bench said it sympathised with the people. In fact, it said, there was hardly any consumer resistance when petrol price was increased. The consumers were reconciling themselves to the frequent price hike. Only political parties were protesting it.

Mr. Thomas, who appeared before the court, pleaded that an interim directive be issued to the Centre not to deregulate the prices of other petroleum products. He argued that fixing price on the basis of the import parity price (IPP) was illogical. It was formulated on the assumption that had there been no oil refining companies in the country, India would have imported all petroleum products and therefore citizens were liable to pay the price prevailing at the international level even for petrol generated in the country.

In fact, there were different components such as freight charges, insurance cost, port handling charges and customs duties involved in the IPP calculation. The OMCs did not incur such charges, Mr. Thomas said.

The prices of petroleum products were increased because of the flawed method of pricing, he said.

“Illogical calculation”

Mr. Thomas said there was no loss called recovery loss. It was only imaginary. The Union government was repeating that the OMCs were suffering a loss of Rs.53,000 crore by way of under recovery. However, their balance sheets showed huge profits.

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