Govt considering partial rollback of bulk diesel prices

Last Updated: Thursday, January 9, 2014 - 17:14

New Delhi: Government is considering partial rollback of market price of diesel sold to bulk users like road transport buses because those sales have dipped, Oil Secretary Vivek Rae said on Thursday.

The January 2013 decision to ask bulk users of diesel like the railways and defence to pay market price, which is about Rs 10 a litre more than petrol pump rates, had led to protests from several state transport utilities.

They have now resorted to sending buses to retail outlets for refuelling instead of buying from oil company depots.

"The objective of differential pricing (subsidised rates for petrol pumps users and market price for bulk consumers) is not being met. We have seen queueing of buses at petrol pumps, leading to congestions and fuel wastage," he told reporters on the sidelines of a Petrotech pre-event conference here.

With state road transport buses - classified as bulk users - going to petrol pumps, and oil companies setting up refuelling depots in their premises, bulk diesel sales have dropped.

"We are considering partial rollback of the bulk diesel pricing order," Rae said.

If approved by the Cabinet, state road transport corporations will get diesel at subsidised rates (equal to petrol pump price) while other bulk users - railways and defence, will have to continue buying the fuel at market price.

"Oil marketing companies have also reported that the dual pricing mechanism is not working since state transport utilities bus fleets are taking fuel from petrol pumps causing hindrance in the smooth functioning of retail outlets and in the process wasting fuel," he said.

Since the decision to sell diesel to bulk consumers was taken by the Cabinet, any relaxation can only be done by it.

The Supreme Court had in August last year endorsed the government decision to charge market prices for diesel sold to bulk buyers such as defence, railways and transport corporations.

The apex court had said that subsidises can't continue forever and ultimately the economy has to survive.

First Published: Thursday, January 9, 2014 - 17:14

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