Bulk diesel price hike forces RTCs to reform

Comments 0
SummaryThe fiscally stressed Centre’s recent decision to annul subsidy on bulk diesel has shaken up the perennially loss-making public sector road transport corporations in the country.

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 is taking an overdraft from the banks every month to meet its basic requirements.

Said another UP SRTC official: “We need to replace our fleet of buses and the cost of the buses has gone up exponentially in the last decade or so. While on the one hand we do not get any support from the state government in the form of equity contribution, on the other hand the hike in capital cost is not factored into the fare, which takes into account only the cost of wages, spares and fuel. As a result the expenditure on capital become a huge cross to bear, what with the prices of buses going up many times in the last decade or so."

In a recent letter to the state government, the corporation said: "In November 2012, the state government had allowed an increase of 10 paise on every seat for every kilometre. At that time, the cost of diesel was Rs 42.46/litre. But since then the prices of diesel have been revised five times till January this year and the effective increase is Rs 18.11 per litre. However, despite that, there has been no increase in passenger fares. This has put the corporation at a loss of Rs 1 crore daily and if something is not done immediately, the corporation will not be able to sustain the blow."

Following the state government’s decision, over 7500 state-owned buses of the Gujarat State Road Transport Corporation (GSRTC) are now buying diesel from retail stations. By buying in the open market, GSRTC pays Rs 52.74/litre for diesel as against Rs 64.74 for bulk diesel. Despite the cost increase, the Gujarat government is not planning to pass it on to the passengers, a decision that might not be in tune with the state’s reformist credentials. State

Single Page Format
Ads by Google
Reader´s Comments
| Post a Comment
Please Wait while comments are loading...