Kerala High Court grants interim relief to KSRTC; directs oil marketing companies to supply high speed diesel at retail rates

In an interim order, the Kerala High Court on Wednesday asked the oil marketing companies (OMCs) to provide diesel to the Kerala State Road Transport Corporation (KSRTC) at retail rates and not charge extra for being a bulk purchaser.

Is this the beginning of the end of differential diesel pricing for bulk users and retail consumers, experts are wondering.

The interim order by Justice N Nagaresh was in response to a plea by the state-owned road transport corporation challenging the OMCs decision to charge a higher rate from bulk purchasers of diesel.

KSRTC has, in its petition, mentioned that it is a public sector transport undertaking and requires 300 to 400 kilolitres per day to ply 5,481 buses. The public utility also added in its plea that it was charged Rs 121.35 per litre for diesel by the OMCs, while the retail consumers were getting it for Rs 91.72 per litre.

The judge in his order also mentioned that prima facie the price levied is highly exorbitant and if it is in pursuance of any agreement, the same prima facie is an extremely unconscionable term of bargain.

“Whatever be the mechanism adopted by the respondents (OMCs) in fixing the rates for bulk supply to consumer pumps, prima facie the rate levied is highly exorbitant. If it is in pursuance of any agreement, the same is prima facie, an extremely unconscionable term of bargain.

“The price of petroleum products depends on several factors and considerations, including its inevitable dependence on international pricing. There is always a possibility of difference in case of consumer pumps like the petitioner and retail outlets from where citizens get their petroleum products,” the OMCs told the court.

KSRTC contended that it has to pay more than Rs 27 extra per litre for diesel to the State-run OMCs as compared to the rate of the fuel at private retail outlets. KSRTC urged the court to direct the OMCs to sell diesel to it at the market rates prevailing at retail outlets and to declare the charging of a higher price from the corporation as discriminatory, arbitrary, unreasonable and violative of Article 14 of the Constitution.

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