SC stays dual diesel pricing cases at HCs

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: May 14 2013, 06:36am hrs
The Supreme Court on Monday restrained the high courts from hearing petitions challenging the Centres policy decision to deregulate prices of diesel supplied to bulk consumers of public utility services.

A bench comprising justices BS Chauhan and Dipak Misra, while seeking a reply from the Kerala and Karnataka governments, their state road transport corporations, Andhra Pradesh State Road Transport Corporation and others, stayed the proceedings in the high courts of Madras, Kerala, Andhra Pradesh, Karnataka and Gujarat subject to public sector oil marketing companies (OMCs) amending their prayers in their petition on a technical issue.

The order came after solicitor general Mohan Parasaran and counsel Amit Meharia, appearing for OMCs, sought transfer of the petitions to the apex court from different HCs, which are hearing pleas against the petroleum ministrys decision to charge bulk consumers at market rates as per its new dual pricing policy of January 17.

The ministry had authorised OMCs to increase the retail selling prices of diesel in the range of 40-50 paise per litre per month, excluding VAT as applicable in different states/ union territories, until further orders. Since January, the prices were hiked three times accordingly, with the latest being 90 paise last week.

Apprehending that the multiple litigations on the same issue would lead to conflicting and contradictory decisions, the three OMCs - Indian Oil Corporation, BPCL and HPCL said that such a situation would also render the Government of India policy ineffective and would completely defeat the rational justifying the issuance and implementation of the policy.

The PSUs led by IOC stated that the primary objective behind the pricing reforms undertaken by the Centre is the growing imperative for fiscal consolidation and the need for reducing subsidy burden on petroleum products, so as to allocate more funds to social sector schemes for the common man and for ensuring countrys energy security in the long term. Failure to do so would have adversely impact the fiscal deficit, resulting in a downward spiralling effect on the economy with consequential significant adverse impact on the common man, they added.

According to the OMCs, over 80% of crude requirement is met through imports. Consequent to the deregulation of the refining sector from April 1998, domestic refineries are totally exposed to the vagaries of international oil market and are not compensated in any form whatsoever based on their costs of refining activity....