Rising fuel prices pushes up KSRTC expenditure

The sudden rise in diesel prices has hit the four state transport corporations hard as they have shell out an additional Rs 10 crore every month, pushing them to losses or compelling them to hike the passenger fares.

Karnataka State Road Transport Corporation (KSRTC) has just recovered from last year’s losses of Rs 177 crore and posted profits of about Rs 10 crore in the beginning of this year. This, even when the state transport corporations, as bulk buyers, get discount of about Rs 2 or more on diesel.

Officials have been conducting routine studies over the last two weeks to understand the financial implications of the steady increase in fuel prices. Two studies, accessed by DH, show how the daily rise in the prices of diesel further escalates expenses of the corporations.

As per an estimate prepared on May 14, the minute increase of price from Rs 63.03 to Rs 63.07 per litre led to an additional expenditure of Rs 7 lakh per month. However, as the corporation started paying Rs 65.08 per litre a day after first study, another study on May 16 showed an increase of Rs 3.68 crore in monthly expense. “The prices have further increased since May 16 and the overall picture does not look good. Even if they fall below Rs 60, it will take some time to balance the revenue and expenditure,” an official said.

The hike in diesel rates have come at a bad time for BMTC, which is chalking out plans to recover from an accumulated losses of Rs 292 crore. The study shows that the corporation’s monthly expenditure will go up Rs 1.96 crore every month. The picture is not different for NEKRTC and NWKRTC, which together will spend an additional Rs 3.65 crore on diesel.

Fare hike

Official sources said though transport corporations had sought permission to hike passenger fares at the end of last year, the state government had rejected it fearing public outrage.

“If the Union government does not cut fuel prices, the new government will have a crisis in the coming days. It has to take a decision on hiking bus fares or release necessary funds to ease the situation,” a senior official said.