With oil market companies deciding to sell diesel at market price to bulk consumers, state-run transport corporations across the country will be under pressure. They will either have to increase passenger fares or bear the additional burden, if state governments do not bail them out with a subsidy.
Private service providers on inter-state as well as inter-city routes are already planning to revise fares. The Karnataka government is planning to effect a rise in bus fares as early as Monday and the calculations are under way, said officials privy to the information. Karnataka may well become the first state to react to the development. Following the increase in diesel price, the Karnataka State Road Transport Corporation and Bangalore Metropolitan Transport Corporation would incur an additional monthly expenditure of about Rs 20 crore and Rs 15 crore, respectively. The loss-making Kerala Road Transport Corporation, too, will have to take an additional burden of Rs 10-12 crore a month for diesel.
Andhra Pradesh State Road Transport Corporation (APSRTC), which runs about 22,000 buses, is "observing" the impact, while also focusing on reducing costs through better maintenance and utilisation of its assets. Over the past nine years, APSRTC has recorded accumulated losses to the tune of Rs 2,800 crore. Last year, it had raised fares by 12 per cent.
Diesel price revisions in the current financial year have resulted in an annual loss of Rs 381.2 crore to the transport undertakings in Tamil Nadu. As they are apprehending an additional Rs 206 crore towards diesel expenditure during this financial year, the option of increasing fares may be considered. However, the state government has decided to bear the additional expenses and Rs 200 crore has been allocated for this purpose. In the eastern states, too, the situation has put the state corporations in a fix. For instance, the state-run transport companies in West Bengal might face an additional burden of Rs 10 crore annually, according to the state's transport minister Madan Mitra.
"In the current scenario, the state government has been providing an annual subsidy of Rs 600 crore to the five state-run transport corporations. This will make the situation worse," he said. Orissa Road Transport Corporation, reeling under an accumulated loss of Rs 250 crore, is expected to take a hit of more than Rs 1 crore a year. As the government had allowed nine to 10 per cent hike in bus fares in October last year, it would be difficult for it to increase the fares again.