Supplyco to provide subsidised fuel to the State transport utility

The government on Wednesday stepped in to offer a temporary relief for the Kerala State Road Transport Corporation (KSRTC), with a meeting convened by Chief Minister Oommen Chandy deciding to hand over 67 fuel pumps operated by the State transport utility to the Kerala State Civil Supplies Corporation (Supplyco) as retail units for sale of subsidised diesel.

Officials of oil companies who attended the meeting agreed to cooperate in granting retail licence to Supplyco to operate the outlets. Briefing reporters after the meeting, Transport Minister Aryadan Mohammed said the measure would help the KSRTC stave off the current crisis by sourcing subsidised diesel from Supplyco. Under the dual pricing system upheld by the Supreme Court on Monday, bulk consumers of diesel such as State transport corporations and the Railways would have to incur an additional burden of Rs.17 a litre over the subsidised price for retail consumers.

Mr. Mohammed said the 67 pumps would be rented out to Supplyco to be operated as retail units open to the public. While the retail licence has to be granted by the Central government, Supplyco would apply to the local bodies concerned for other licences. Supplyco would get commission on the sale of fuel through the 67 outlets.

Temporary solution

The Minister said Wednesday’s decision was a temporary solution to the crisis facing the transport utility. The State Cabinet is slated to discuss ways to keep the KSRTC afloat till Supplyco is granted licence to operate the 67 pumps. “The Supreme Court ruling has only vacated the stay on implementing the dual pricing system for diesel. The case is pending.” He added that oil companies were willing to cooperate with the government in providing subsidised fuel to the KSRTC.

It is estimated that non-availability of subsidised diesel would burden the State utility with an additional burden of over Rs.22 crore a month, adding to its mounting losses. The KSRTC needs 4.2 lakh litres of diesel a day.

Refuting reports about the KSRTC slashing operations to curb losses, Mr. Mohammed said 4,736 buses had operated on Tuesday. “While 4,533 services were operated the same day last year, the number was 4,275 in 2011.” He said there was no move on the part of the KSRTC to cancel schedules.

The Minister said the government would retain the staff of the KSRTC and their benefits, including pension, at any cost. Asked about an alternative arrangement for the KSRTC to purchase subsidised diesel from private pumps, he said the decision would have to be taken by the Cabinet.

Responding to a question on hiking bus fares, Mr. Mohammed said it would require the approval of the Ramachandran Commission and the State Cabinet.

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