West Bengal govt examining options on diesel hike impact on transport dept

The West Bengal government is examining options to mitigate the impact of diesel price deregulation for the ailing transport department that caused an additional hike of Rs 11 per litre for bulk diesel consumers.

The transport department procured diesel through bulk purchase for buses, but, the dual pricing concept for bulk and retail has created a price difference of around Rs 11.

"We are examining all options," Transport Secretary Alapan Bandyopadhyay said when asked about strategy on diesel procurement for the transport sector.

The government was examining the pros and cons of sending its buses to retail pumps to secure fuel at the retail price, sources said.

The government would, however, face dual challenge for retail purchase of diesel -- increased threat of corruption in fuel procurement and whether buses would have enough cash to buy it, the sources said.

Moreover, the price over a period of time will be the same as price of retail diesel would be hiked in small doses by oil companies to eventually match the bulk price.

With the diesel price deregulated since mid January 2013, the additional expenditure for the transport sector would be Rs 50-60 crore annually on account of fuel if the bulk purchase concept was maintained.

The existing government subsidy bill on the transport department was already Rs 600 crore annually.

The transport sector comprises five state-run transport corporations -- Calcutta State Transport Corporation, North Bengal State Transport Corporation, South Bengal State Transport Corporation and West Bengal Surface Transport Corporation.

Government transport also could not raise fares with private transporters buying fuel at the retail price which was cheaper compared to bulk.

Transport minister Madan Mitra had recently said that with dual pricing, Rs 11.20 more per would have to be paid for a litre of diesel, which would make it impossible to run buses.

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