Diesel price cut has not brought much cheer to transporters

Each time there is an increase in fuel prices, transporters are forced to increase charges across the board.

Each time there is an increase in fuel prices, transporters are forced to increase charges across the board. | Photo Credit: S.R. Raghunathan

The recent reduction in diesel price, effected by the Centre, by ₹7 a litre has not brought much cheer to transporters.

“We are just happy our losses are down by a notch. In two years, diesel prices have gone up from ₹66 a litre to ₹100 a litre. In the 1970s, heavy vehicles used to run on kerosene since the fuel was cheaper by 25 paise a litre than diesel. Diesel used to cost 75 paise a litre. But now if we are actually supposed to hike our prices by ₹1 a km, we can only increase rates by 50 paise. If we hike too much, there is always competition and we stand to lose customers,” said R. Vangli, secretary, Tamil Nadu State Lorry Owners Federation.  

In Tamil Nadu, there are 4.5 lakh heavy vehicles, which travel long distances carrying goods. And if the small load-carriers are included, the number will come to 11 lakh. Another trucker said things were bad for those owning a fewer number of vehicles. “Truckers had sought time to pay road tax but even that was not given. Diesel prices have not just driven up the prices of transport but also of other goods. As far as the sector is concerned, the prices of tyres, retreading, lubricants and spare parts have all gone up. The Centre’s policies only show that it does not want smaller fleet owners to continue. If this situation continues, we will have to close down our businesses. Many of us are sticking at it since we don’t know any other business,” he said.

P.V. Subramani, of the All India Motor Transport Congress, alleged that fuel prices are brought down only when elections are in sight. “Our freight charges don’t go up as much as they should when diesel prices increase. However, when diesel price is reduced, freight charges are brought down as much as the decrease in diesel prices. Many companies are nearing bankruptcy and in such a situation, diesel price hike or reduction does not matter. The government urged us to work even during the COVID-19 lockdown, which we did. But there was no use,” he said.  

Transporters are also unable to manage the cost because of the daily changes in fuel prices. Each time there is an increase in fuel prices, transporters are forced to increase charges across the board. For instance, a lorry that transports a load of potatoes from Mettupalayam in Coimbatore district to the Gandhi Market in Tiruchi has to spend ₹1,700 more on diesel. The farmer or supplier has to bear the additional burden and it will ultimately be passed on to consumers.  

“If the revision takes place once in three months or six months, we can fix the transport charges accordingly. How do we fix rent when upward revision takes place almost daily? I have seen many transporters sell off their fleets and settle with one or two owing to the governments’ policy of viewing fuel as a source of revenue,” said S. Rajamani, president, Tamil Nadu Motor Transport Federation. 

“The cost of loading sand, M sand or P sand has gone to ₹80 from ₹60 per unit. The cost of loads being transported on tippers goes up to ₹65 from ₹55 a km. It will eventually shoot up the construction cost,” said R. Ravikumar, an earthmover operator in Srirangam. 

Author and economic observer S. Viswanathan said the diesel price reduction has been negated by the increase in other expenses. Though in certain segments, there has been an increase in traffic movement and the efficiency of the Railways has improved, which means long-distance traffic has reduced. It takes lesser time for trucks to travel long distances, too, since restrictions have been removed. One cannot expect any reduction in State taxes since Tamil Nadu’s finances are not very comfortable. The government has salaries to pay, debts to repay and freebies to give, he said.  

D. Thulasingam, president, Tamil Nadu Rice and Paddy Millers Association, said wholesalers had not passed on transport charges to retailers so as to keep the prices of rice affordable for consumers.

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Printable version | Aug 17, 2022 2:08:05 am |