Govt to take stock of SC order on diesel subsidy: Chandy

Kerala government today said it would take stock of the Supreme Court order, setting aside a High Court ruling to maintain subsidised diesel by oil companies to bulk consumers of public utilities, and hold talks with them to sort out the issue.

"The government will examine all aspects in the light of the order and hold discussions with oil companies to sort out the issue and if necessary, take it up with the Centre.

Kerala State Road Transport Corporation cannot absorb the new burden and a solution would be found to overcome the situation," Chief Minister Oommen Chandy said.

The apex court had yesterday cleared the decks for Centre for not providing subsidised diesel to bulk consumers of public utility services like Railways and state transport corporations, saying the economy is in bad shape and pragmatic approach is needed to be taken on subsidies.

It set aside the stay orders on implementation of Centre's policy on deregulation of diesel prices passed by Madras and Kerala High Courts.

The ruling means KSRTC has to pay Rs 17.43 more per litre of diesel from today for four lakh litres it needs daily. The additional fuel expense on account of subsidy loss would come to around Rs 23 crore every month.

State Transport Minister Arayadan Mohammed said the cabinet would discuss the issue, but ruled out immediate hike in fares as suggested by the Apex Court.

A decision in this regard could be taken only after getting the recommendations of the permanent commission set up to look into the aspect of increasing fares of both private and KSRTC services, he said.

Mohammed rejected the charge that KSRTC found itself in the present situation due to the inefficiency of employees.

He also ruled out the option of withdrawing various travel concessions given to different categories of people to overcome the situation.

However, he said KSRTC that incurs a Rs 1,100 crore loss every year could not go like this for long. "Efforts have to be made to revive the Corporation," he added.

Sources there was also a move to reduce the total of 5,000 service schedules of KSRTC to tide over the situation.

Earlier this year, government had moved the High Court, seeking a directive to all oil companies in Kerala to supply diesel to KSRTC at subsidised rates, taking into account it is a public utility.

The Court had upheld government's view and asked oil companies to continue to provide KSRTC subsidised diesel.