The upward trajectory of fuel prices is crippling the already cash-strapped Road Transport Corporations in Karnataka. They are likely to approach the State government seeking revision in bus fares to compensate for the revenue loss.
Last year, around this time, corporations were purchasing diesel at ₹62.51 per litre. Today, they are paying around ₹76.22 per litre (bulk purchase cost), an increase of over 20% at a time when people, for the most part, are still avoiding public transport for fear of contracting COVID-19.
Due to poor ridership after the lockdown, RTCs have already incurred a loss of ₹2,500 crore.
Shivyogi C. Kalasad, Managing Director of KSRTC, said, “A revision of bus fares is required to meet increasing operational cost. Moreover, the fares applicable for Bangalore Metropolitan Transport Corporation (BMTC) have not been revised for seven years. Last February, the Karnataka State Road Transport Corporation (KSRTC) was allowed to revise fares, but it has not made any significant change in revenue collection post-COVID-19.”
He added that the matter was broached with the Transport Minister. “It is still in the preliminary stage of discussion. We have not formally approached the government seeking a revision,” he said.
All the four corporations (KSRTC, BMTC, NEKRTC and NWKRTC) purchase 48,960 kilolitres of diesel every month. “There has been a consistent increase in the price of fuel. We are paying 25% more compared to April 2020. After schools and colleges started re-opening, we have started running buses on almost all the routes, but ridership remains low,” said Mr. Kalasad.
Burden of student passes
Another financial burden is student passes. The government’s share in subsidised passes has reduced from 50% to 40% while that of students has come down from 25% to 8%.
“The respective corporations bear the rest of the cost. Over the last six years, cumulatively, ₹3,000 crore was due from the State government as its share for the subsidised passes. Of this, ₹1,500 crore was released to pay the staff after the outbreak of the pandemic,” he added.
The Corporations have also sought concession from paying Motor Vehicle Tax. Every year, they pay ₹300 crore. Another concession sought is on payment of sales tax on diesel that comes up to around ₹500 crore.
( This is the first of a three-part series on the impact of fuel price rise )