The decision of the Oil Manufacturing Companies (OMCs) to increase the diesel price for bulk purchasers will hit the cash-strapped AP State Road Transport Corporation (APSRTC) hard. Since the move will make a further dent in the RTC revenue, the Corporation has decided to buy fuel from private retail pumps to trim expenditure, for now.
At a press conference on Tuesday, the Vice-Chairman and Managing Director of the public sector transport organisation Ch. Dwaraka Tirumala Rao said as a strict economic measure, a decision was taken to procure High Speed Diesel (HSD) from private retail outlets for a limited period, till the bulk purchase price stabilises. He said a circular has been issued to all unit officers for immediate implementation of the decision.
Elaborating further, he said the APSRTC procures HSD for its 129 depots in the 13 districts of the State directly from the OMCs at competitive rates. The fleet of APSRTC buses consume 30 crore litres of HSD annually and major suppliers of the fuel are Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL).
Mr. Rao said like all other State Transport Undertakings (STUs) in the country, APSRTC is classified under bulk consumer category and the price structure of HSD for this section is different from private retail outlet category. “The bulk category price is always less than that of private retail price,” he said.
The APSRTC calls for tenders once in three years to select oil companies for supply of HSD and depots are allotted to the oil firms that offer competitive discounts per KL on the prevailing bulk consumer price. Discount rates are fixed for each depot through e-tender followed by reverse e-auction. As per the discounts offered by the firms in the previous tender, the gross discount availed by the APSRTC from the OMCs stood at ₹52.46 crore in 2021,” he informed.
Tenders finalised
Mr. Rao said tenders were finalised recently for the next three years and the fuel supply was likely to start from this March. “The discount offered by the oil companies has increased significantly and it is estimated to save expenditure on procurement of HSD to the extent of ₹158.96 crore per annum, against ₹52.46 crore in 2021, under bulk consumer category.
But with the government allowing the oil companies to increase the HSD price for bulk consumers like APSRTC, TSRTC and Singareni power generation plants, the retail oil price may go up significantly after some time.
He said the arrangement of procuring HSD from private retail outlets would continue only till the retail price exceeds the bulk consumer price.
