No rollback on bulk pricing: Oil Min

Madras HC granted interim injunction against dual pricing system by OMCs

A day after the Madras High Court granting an interim injunction against the dual pricing system by oil marketing companies (OMCs), the petroleum and natural gas ministry said today that it has no intention to revise bulk prices now.

The Court's direction was in response to a petition filed by the Tamil Nadu State Transport Corporation (TNSTCs) against the dual pricing for bulk and retail sale of diesel.

“We are studying the order and will take a call soon. As far as bulk pricing is concerned, the government has no intention to revise it once again,” said a top petroleum ministry official.

However, sources said that the order would have no implications outside the state.

The government had shifted to dual pricing system coupling with diesel decontrol on January 17, in order to save about Rs 12,907 crore from the subsidy burden. However, the decision had affected bulk customers such as defence, railways’ and state transport utilities had to pay at the market price.

When asked about the High Court order and bulk pricing, the petroleum and natural gas minister M Veerappa Moily too echoed that it’s a policy decision and the government is studying it. The dual pricing system has affected the state transport undertakings (STUs) and the Railways’ badly.

Due to dual pricing, STUs in Tamil Nadu would incur additional burden of Rs 743.55 crore per annum due. There are eight STUs operating in the state, with a fleet capacity of 20,500 bus services catering to around two crore passengers every day.

The Tamil Nadu STUs argued in the court that 35% of the total loss incurred by them was due to the increasing cost of High Speed Diesel. These STUS are the biggest labour oriented organisations in the State with more than 1,29,350 employees.

In 2011-12, the Corporations have incurred a loss of Rs 1,791 crore, with a cash loss of Rs 1,392 crore. The losses incurred from April 2012 to January 2013 was around Rs 756 crore with a cash loss of Rs 397 crore.