Distressed over the PSU oil marketing companies’ (OMCs) decision to sell diesel to the bulk purchasers at a higher price compared to the market rate, state-owned Kerala State Road Transport Corporation (KSRTC) has urged the Supreme Court to direct the Central government to create an independent regulatory authority under a former judge to control the rising fuel prices.
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 and in the absence of any regulatory authority to check the malpractice and exploitation by the OMCs, the hapless consumers are forced to bear the brunt of the uncontrolled price hike, it said. The KSRTC added that the fuel price decontrol system allowed by the petroleum ministry since 2014 was being exercised in “colourable 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 has sought revocation of the decision on the ground that this increase in the price of diesel sold in bulk only to KSRTC is significantly higher than the market price of diesel, thus will further burden it which is already suffering exponential financial crisis year after year and might eventually lead to its shutting down.
Since such the deregulation of fuel prices that authorised these PSU OMCs to fix the price of petroleum products as per the prevailing rate in the international markets, there has been an unprecedented hike in the fuel prices, KSRTC said, adding that this arbitrary decision to sell at price higher than the current market price of diesel is against the fair-trade practices and settled business principles and is also violative of its fundamental rights. These OMCs are enjoying “monopoly of fuel by exploiting their dominant position by arbitrarily increasing the fuel price,” the corporation said.
The public transport utility further stated that if it today chooses to purchase diesel from retail outlets, it will have to pay Rs 93.47/litre against Rs 97.88 per litre charged by PSU OMCs and this “discrimination is totally illogical.”
“Despite saving a huge amount of money in terms of agency commissions and logistical expenses, these state-owned OMCs have developed a tendency of squeezing money and making profits, unlike the Corporation, which functions not with the objective of generating profits but by prioritising the interests and convenience of public by providing essential public service,” the petition added.
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.
As per the prevailing general principles of businesses across the globe, bulk purchasers get discounts from the sellers in comparison to the retail prices because the seller saves a considerable amount of money, the public transport utility said.
