Bulk diesel price hike forces RTCs to reform

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Deepa Jainani , Sajan C Kumar, BV Mahalakshmi: Hyderabad, Feb 02 2013, 03:19 IST

price by Rs 11.89 per litre. Prior to the price hike, APSRTC was hoping to reduce its losses substantially this fiscal, despite an increase of 20% in operational costs. It hasn’t given up yet and is mulling revenue-enhancing measures. Said AK Khan, vice-chairman and managing director, “Though the rate of diesel has increased, necessary alternative steps are being taken to overcome the problem. As part of our strategies, the corporation is in talks with the state government for removal of the VAT (value-added tax) on diesel, MV (motor vehicle) tax and also exemption of toll fees.”

APSRTC’s annual expenditure on diesel was estimated at Rs 3,260 crore before the price hike. As part of increasing revenues, it plans to maintain punctuality in running its services to lure passengers and increase the occupancy ratio to 78% from the existing 74%. A 1 percentage point increase in the occupancy ratio will boost revenue by Rs 60 crore.

Stating that deregulation of bulk diesel prices has hit the corporation hard, UP State Road Transport Corporation managing director Alok Kumar said that there is an urgent need to prioritise public transport.

“We are finding it difficult to meet the costs in the present fare structure. What we need to do immediately is to automatically pass through the fuel cost.”

He added that the corporation, on average, has a monthly expenditure of Rs 250 crore, while its average income is Rs 220 crore. UPSTC is deep in the red and faces difficulty even in paying wages. It

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