Staff Reporter

Transport corporations reluctant to raise fares

State road transport corporations likely to suffer Rs. 130 crore burden annually

We are not going to effect a raise in freight charges immediately: Shanmugappa

BANGALORE: The common man appears to be spared for the time being from the impact of the rise in diesel prices as the State road transport corporations as well as goods carriers are reluctant to raise fares and freight charges.

If the diesel price burden on freight operators is to be passed onto the public, the charges have to be increased at least by 15 per cent, said G.R. Shanmugappa of the Federation of Karnataka Lorry Owners and Agents Associations. “However, we are not going to effect a raise in freight charges immediately,” he said.

A meeting has been convened in New Delhi on Tuesday where the price rise issue will be discussed.

The Union Government will be urged to roll back the price rise, Mr. Shanmugappa told The Hindu.

He criticised the Union Government for increasing the fuel prices saying international oil prices have not changed from the time of the general elections [in India] to now.

On the other hand, Karnataka State Road Transport Corporation, Bangalore Metropolitan Transport Corporation, North West Karnataka Road Transport Corporation and North East Karnataka Road Transport Corporation are likely to suffer Rs. 130 crore burden annually due to the rise in diesel price.

Sources in the corporations said the price rise comes along with increased dearness allowance payable to employees and an increased house rent allowance.

However, the Government may not allow the corporations to increase the fares immediately, the sources said.

A litre of diesel now costs Rs. 37.01 in the city as against the earlier price of Rs. 34.80. Similarly, petrol sold within the city costs Rs. 50.66 a litre and in the suburbs Rs. 50.37 a litre.


Despite repeated pleas to the State Government, Mr. Shanmugappa said, the tax incidences on diesel have not been reduced, making diesel sold in the State the costliest in the country.

A litre of diesel is sold at Rs. 34.98 in Chennai, Rs. 32.87 in Delhi, Rs. 35.03 in Kolkata and Rs. 36.70 in Mumbai, he noted.

As a result, over 60,000 trucks passing through Karnataka won’t fill their tanks in the State and prefer neighbouring States where diesel is cheaper.

He claimed that the State is thus losing tax revenue on nearly 50 lakh litres of diesel every day. If the price is brought on a par with neighbouring States, the State could regain the lost revenue, he said.


Mr. Shanmugappa wondered how the oil companies could manage their coffers by just increasing Rs. 2 on diesel and Rs. 4 on petrol when the international oil prices have almost doubled. Diesel was sold at Rs. 34.80 in Bangalore when international oil price was at $ 37 a barrel and the retail price is increased by Rs. 2 when the price has reached $ 73 a barrel. “It means that there is something else working behind the petro product pricing in the country,” he said.

He alleged that the Union Government was forced to increase fuel prices to facilitate a large private player to open his closed retail outlets and sell the products. If the prices were at the pre-July 1 level, the private player could not have sold the product as his production cost would have been equal to the selling price, Mr. Shanmugappa said.