BENGALURU: The steady rise in diesel prices has resulted in state transport undertakings (STUs) incurring additional expenditure without a commensurate rise in income, a report released by Karnataka Evaluation Authority (KEA) states.
“It is, therefore, essential for the government to compensate transport corporations. The base price of diesel as on the date of fare revision should be fixed and any increase in rates should be compensated by the government,” the report said.
KEA, which falls under the department of planning, programme monitoring and statistics, recently evaluated the performance of three STUs — KSRTC, NWKRTC and KKRTC — between 2014-2015 and 2019-2020.
Currently, diesel for bulk buyers is priced at a record Rs 120.2 per litre compared to Rs 87.8 per litre for retail users. However, although STUs are bulk buyers, they have reached an informal arrangement with oil companies/retailers to supply fuel at retail rates.
The report also said certain rural routes contribute to losses since load factor is poor. It said that on these routes, where operation is required for social reasons, an appropriate mechanism must be worked out to provide compensation for the shortfall.
It also recommended STUs identify surplus and non-operating assets and monetise them. “Provision of shopping malls, parking lots, dormitories, food courts, logistic hubs, multi-storey buildings, etc., may be explored depending on local demand,” the report said. It also suggested transfer of fare concessions directly to beneficiaries’ accounts. “The government may explore the option of making DBT to the segments of passengers, who are provided with concessions...,” it said.
TN model
V Anbukumar, KSRTC managing director, said STUs will not be able to survive without government help. He said KSRTC fares were last revised by 12% in 2020, when diesel price was only Rs 62.4 per litre, while BMTC fares were last revised in 2015.
“The four STUs together require about 20 crore litres of fuel per year and we paid Rs 768 crore to the state government last year in terms of fuel tax alone,” Anbukumar said. “We have sought financial assistance from the government. In Tamil Nadu for instance, a base price of Rs 60 per litre of diesel is fixed and TN government reimburses STUs for any increase in fuel prices. They have no pressure to increase fares whenever there is a hike in diesel prices.”
