Kerala state RTC moves SC against OMCs' decision to sell diesel at higher prices to bulk buyers

Kerala State Road Transport Corporation has approached the Supreme Court for a direction to the Centre to create an independent regulatory authority under a former judge to control the rising fuel prices.

The state-owned corporation was concerned over the public sector oil marketing companies’ decision to sell diesel to bulk purchasers at a price higher than the market rate.

It contended the central government, by introducing petrol price deregulation, has passed the buck to the OMC to fix the price without any timely intervention or regulation. In the absence of any regulatory authority to check the malpractice and exploitation by the OMCs, hapless consumers are forced to bear the brunt of the uncontrolled price hike, it contended.

The plea maintained that the fuel price decontrol system allowed by the Petroleum Ministry since 2014 was being exercised in “colorable manner for the purpose of helping the private players in the industry.”

Terming the OMC’s decision of February 1 to increase the diesel price for bulk purchasers as “manifestly discriminatory, arbitrary and unreasonable,” the Corporation sought its revocation as it would burden the KSRTC, already suffering exponential financial crisis year after year and might eventually lead to its shutting down.

The public transport utility further said if it today chooses to purchase diesel from retail outlets, it will have to pay Rs 93.47 per litre against Rs 97.88 per litre charged by PSU OMCs and this “discrimination is totally illogical.”

Stating that the average consumption of diesel by the Corporation is around 4.10 lakh litres per day, the petition stated that the OMC’s decision will result in an approximate accumulated loss of around Rs 19 lakh, which will add to the currently persisting acute financial crisis being suffered by KSRTC.

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