Supply diesel to KSRTC at subsidised rate: Kerala HC

State govt assures the court it will compensate the loss to the oil companies

The Kerala high court on Thursday directed public sector oil companies -- Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Limited (HPCL) -- to supply diesel to the Kerala State Road Transport Corporation (KSRTC) at subsidised rate.

In a petition filed by the corporation, a single bench opined that the stand of the oil companies was discriminatory. The state government has assured the court it would compensate the loss to the oil companies.

Earlier, the Madras high court had issued an order to supply diesel at subsidised rate to public sector transport corporations. Citing this, the KSRTC said IOC had assured the Madras high court it would supply diesel at subsidised rate, unconditionally.

The KSRTC also questioned the legal sanctity of the order issued by the Ministry of Petroleum on January 17 and prayed the court to issue direction to the ministry to revoke it.

Justice V Chidambaresh admitted the petition filed by the KSRTC managing director on Monday in this regard.

The counsel for the oil companies contended that the state was charging Rs 12 as sales tax towards a litre of diesel and they are not prepared to forgo it.

The transport corporation is currently getting diesel at Rs 62.10 a litre, while the open market rate is Rs 50.30. This has caused cancellation of several services, pushing the corporation into a financial crisis. The daily average collection has dropped by Rs 1-4 crore while the daily loss has shot up to around Rs 3 crore.

Due to the steep rise in diesel price alone, the daily working cost has increased by Rs 18 crore. Petroleum minister Veerappa Moily had advised the chief minister to switch to low-value energy sources like CNG and offered Rs 100 crore for this. The corporation needs Rs 35 crore on a monthly basis for pension alone.

According to KSRTC sources, there was a deficiency of Rs 94 crore in a month with an annual revenue gap of Rs 1,128 crore.

From last week onwards, its buses had started filling diesel from private pumps. The corporation has 4,500 buses and each bus requires 200 litre diesel daily.

Finance minister KM Mani had allocated Rs 100 crore to the KSRTC as a special aid in the Budget and on Wednesday he raised this to Rs 200 crore.

The corporation, however, is demanding a special package of around Rs 1,100 crore.