Price mechanism: Kerala HC directs oil companies to file statement

The court pointed out that the transport corporation had already sought to be treated as a bulk purchaser.

Published: 23rd March 2022 06:14 AM  |   Last Updated: 23rd March 2022 06:14 AM   |  A+A-

KSRTC bus stand

By Express News Service

KOCHI: The Kerala High Court on Tuesday directed oil marketing companies to file a statement explaining the present pricing mechanism for retailers and bulk consumers by the next posting date. The court issued the order on a petition filed by Kerala State Road Transport Corporation (KSRTC) challenging the decision of oil marketing companies to increase the price of diesel sold to the corporation, which is allegedly much higher than the market price. 

Justice  N Nagaresh, however, declined to issue an interim directive to oil companies to sell HSD (high-speed diesel) at the retail outlet price and also a directive not to further enhance the price of HSD, saying it could not issue such a directive for the time being. 

When the petition came up for hearing, the court asked the oil companies why they could not give some differential treatment to the KSRTC, a public utility service. When counsel for KSRTC submitted that the corporation was already running at a loss and it would have to shut down its services due to the increase in the price of diesel, the court said that the corporation itself had to take the blame for it. 

The court pointed out that the transport corporation had already sought to be treated as a bulk purchaser. KSRTC counsel then submitted that it chose to purchase diesel in bulk for its separate fuel pumps, as otherwise, traffic snarls would have occurred at retail outlets. 

KSRTC in its petition submitted that the action of the oil companies in selling HSD at a price higher than the maximum retail price to a bulk consumer such as KSRTC  was unreasonable and irrational.


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