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SC order on diesel price may hit RTCs’ operations

Anil Kumar Sastry
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Stay orders against decontrolling of prices for bulk consumers set aside

The recent Supreme Court order on decontrolling the price of diesel for bulk consumers has disappointed State-run road transport corporations (RTCs), which will have to continue to buy the fuel from retail outlets to avoid paying a higher price.

The apex court, while setting aside stay orders passed by the High Courts of Madras and Kerala against decontrolling of diesel price for bulk consumers, said transport corporations would have to find ways to sustain themselves without seeking subsidy. Public sector oil marketing companies (OMCs) increased the price of diesel for bulk consumers on January 17.

Services cancelled in Kerala

Meanwhile, unlike the Kerala State Road Transport Corporation, which has reportedly cancelled about 2,000 services, the RTCs in Karnataka have decided to continue to buy diesel from retail outlets and operate the services. “We have to continue the existing practice and there is no other way,” P. Ravi Kumar, Principal Secretary, Transport, said.

Karnataka State Road Transport Corporation (KSRTC), Bangalore Metropolitan Transport Corporation (BMTC), North West KRTC and North East KRTC — with a total fleet of over 22,000 buses buy 5,46,384 kilo litres of diesel annually at a cost of about Rs. 3,065 crore at retail prices (Rs. 56.10 a litre).

If they are to buy diesel in bulk, the corporations will have to shell out at least Rs. 770 crore extra (at Rs. 70.30 a litre).

It had been a smooth affair when diesel was bought in bulk as the stock was delivered to outlets in bus depots by OMCs.

While the corporations used to make payments on weekly basis, the OMCs used to offer some discount too for the bulk purchase.

The situation, however, changed dramatically after January 17. Finding it unreasonable to pay an additional Rs. 11.95 a litre for bulk purchase, they started filling fuel from retail outlets and the practice is still being continued.

Management issues

BMTC managing director Anjum Parvez told The Hindu that retail purchase of diesel had created a whole lot of management issues as a majority of ministerial staff in depots were engaged in the purchase of diesel. “The system has necessitated close monitoring of the purchase system as over 6,000 buses have to be filled at retail outlets while payments have to be made daily,” he said.

In good health

Unlike RTCs in other States, corporations in Karnataka are in good health and have no plans to stop operations. “We are planning to add more buses and expand the service network,” Mr. Parvez said.

The corporations are taking care to prevent pilferage of diesel through a close watch of the purchase by deploying security personnel as well as by monitoring of mileage.

At the same time, they are in dialogue with retail outlet operators located close to depots for direct supply, Mr. Parvez added.


  • They will have to buy diesel from retail fuel pumps to avoid paying a higher price

  • Public sector oil marketing companies increased the price of diesel for bulk consumers on January 17


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