MADURAI/SALEM: The increase in fuel prices has blown a hole in the wallet of the transport sector, which is struggling to ride out the financial storm as its running costs have become almost unsustainable.
The shortage of CNG supply has only added to the woes, prompting several transport associations to revise fares. And this may generate a kind of cascading effect, leading to increase in prices of essential commodities as transport remains central to almost every sector.
Tamil Nadu Lorry Owners Federation president C Dhanraj said sectors dependent on road transport — including Thanjavur’s paddy trade, Salem’s sago industry, Tiruppur’s textiles, Namakkal’s egg transport and vegetable and milk supply chains — would be affected.
“Once transport charges increase, prices of essential commodities will also go up,” he said. As desperate times call for desperate measures, many in TN have increased lorry freight charges by 30%, some have revised the minimum autorickshaw fare from Rs 59 to Rs 79.
Tamil Nadu Lorry Owners Federation vice-president C Sathiah said diesel prices has jumped from Rs 92.32 per litre to Rs 100.53 within a week. “Considering the increase in toll plaza charges, insurance premiums and labour costs, we have no option but to increase freight charges by 30%,” he told TNIE. He said transporting 10 tonnes of vegetables from Hosur to Madurai, which earlier cost Rs 18,000 per trip, now costs around Rs 21,500.
Explaining the diesel price hike blow to lorry operators, Dhanraj said a single trip between Salem and Chennai requires nearly 200 litres of diesel, and with prices at Rs 100 per litre, operators are now spending around Rs 20,000 on fuel alone for the trip. “After toll charges, driver expenses and other costs, very little profit remains. The recent hike alone has contributed Rs 1,500 as an extra expense for this trip,” he added.
Vaigai Meter Auto founder C Suresh (Madurai) told TNIE, “The increase in petrol and diesel prices is an additional burden on us. We have revised the minimum auto fare from Rs 59 to Rs 79, and it was implemented 20 days ago. The minimum auto fare has been increased across the state.”
Similar concerns were raised by rig owners at Tiruchengode in Namakkal, one of the country’s largest hubs for borewell rig operations, with nearly 8,000 rig operators working in the region, most of them small-scale owners operating one or two rigs. N Gunasekaran, president of the All India Rig Owners Welfare Association, said,
“For every one foot drilled, nearly one litre of diesel is consumed. Borewell drilling is usually carried out anywhere between 300 feet and 1,200 feet, depending on the terrain.” He rued that with increasing operational costs, profit margins have already fallen close to two percent, and is afraid the profit may become almost negligible with the current fuel hike.
The diesel price rise has also affected ash transporters operating out of Mettur Thermal Power Station in Salem, where nearly 1,500 vehicles are engaged in transporting dry fly ash and wet ash from thermal power stations to cement factories. “When the diesel price crossed Rs 93/litre, we demanded a revision in freight rates, but now it has touched Rs 100 per litre,” said T Santhosh Kumar, an ash transporter.
However, LPG bulk transporters in Namakkal have found some relief, as they operate under contracts with oil companies that include escalation clauses linked to fuel prices, allowing freight rate revisions whenever diesel prices rise. A TNSTC official said fares were revised in 2018 when diesel was priced at Rs 63 per litre. “We are currently unable to hike bus fares, though fuel prices continue to rise.”