In a temporary relief to the KSRTC, the Kerala High Court, in an interim order on Wednesday, directed oil manufacturing companies (OMC) to sell high speed diesel to the state-run transport corporation at the same rate that is applicable at fuel retail outlets.
It was when the fuel prices was hiked last month that the OMCs said bulk purchasers will have to pay more. When this decision came, the KSRTC approached the high court, but it refused to stay the new directive of OMCs and posted the case for detailed hearing.
On Wednesday, a bench of Justice N. Nagaresh directed the OMCs to levy the price of HSD at par with the price available at retail pumps while clarifying that this relief was subject to the outcome of the petition.
“The agreement says that the respondents are bound to supply HSD at competent rates. Whatever be the mechanism adopted by the respondents in fixing the rates for bulk supply to consumer pumps, prima facie, the price levied is highly exorbitant. If it is in pursuance of any agreement, the same is prima facie, an extremely unconscionable term of the bargain,” said the judge and added that the interim order is provisional and will be subject to the outcome of the writ petition.
The argument put forward by the OMCs’ counsel was that bulk and retail consumers are different, as the former gets credit and hence, they cannot argue that they are treated differently.
“Pricing is neither the concern nor the forte of a writ court. Price fixation is not within the expertise of the court. There is no statutory requirement for price fixation since it is a deregulated market and it is purely contractual. Contractual obligations can only be examined by a court if they fall in the public law domain,” counsel said.
The matter has been posted for a further date, when the court will again examine all the arguments and until then the KSRTC will need to pay only normal rates.
Public utility KSRTC, which is already reeling under huge losses, had shell out around Rs 80 lakh per day due to the bulk purchase directive and hence they resorted to refilling fuel from different fuel pumps.
If the government had not been pumping funds into the KSRTC, it would have closed down. Over 35,000 employees are working in the corporation, which operates 5,000 buses, has around 5,100 schedules and runs on an average of 1.6 million km every day.
Successive governments in the state have only been offering lofty promises, but nothing much has happened leaving the public utility to have a hand-to-mouth existence.