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HindustanTimes Thu,28 Aug 2014

State buses buying diesel in retail, dual pricing comes up a cropper

Sanjeev Bhalla  Jalandhar, March 22, 2013
First Published: 18:28 IST(22/3/2013) | Last Updated: 18:30 IST(22/3/2013)

State transport undertakings have been using retail pumps to fill diesel in buses for over two months now, even as they are supposed to buy fuel at designated outlets, and pay nearly Rs. 10 more than the retail rate.

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The practice is hurting the oil marketing companies' attempt to ease their  under-recoveries by classifying a certain category of consumers as bulk. For February, companies have seen a 60% dip in sale of diesel to direct or bulk consumers. After the increase in diesel prices on January 17, the difference in rate of diesel for retail and bulk users climbed up to more than Rs. 10.

Mindful of leakage, the ministry of petroleum and natural gases had instructed all major oil companies to take steps to ensure that bulk consumers do not buy the fuel in retail.
"How can I bear a loss of crores of rupees, if we buy buses from our own pumps. As a prudent measure, we have asked our staff to avail the facility to buy diesel from retail outlets," a PRTC official said on the condition of anonymity.

"A majority of buses are buying fuel from retail outlets and depots are not purchasing diesel, citing the loss to exchequer. We cannot refuse to fuel their buses, as instructions issued to us state that whenever a bus approaches retail outlets, they should be treated like normal customers," an official with Indian Oil Corporation said.

"Oil companies are directly responsible for this leakage. They rue loss due to under-recovery on, but have failed to check this leakage of retail fuel to buses. The cost will ultimately be passed on to the common man. It is like a commercial user using a domestic LPG cylinder. It is hard to understand why no action is being taken against direct customers who violate guidelines," said Gurmeet Monty Sehgal, state executive member of Confederation of Indian Petroleum Dealers.

State transport commissioner Harjit Singh was not available for comments in spite of repeated attempts to contact him.

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