Bulk diesel price up, Tamil Nadu state transport corporations turn to retail outlets

While the move will save the debt-ridden corporations money, government bus passengers may face longer travel times.

Published: 21st March 2022 04:17 AM  |   Last Updated: 21st March 2022 04:17 AM   |  A+A-

Diesel, Petrol, Fuel

Image used for representational purposes (Photo | EPS)

Express News Service

CHENNAI:  With oil companies increasing the price of bulk diesel by Rs 23 to 24 per litre from Sunday, Tamil Nadu’s eight State transport corporations (STCs), which procure 16 lakh litres of diesel a day to run 19,270 buses, decided to purchase diesel directly from retail fuel stations. While the move will save the debt-ridden corporations money, government bus passengers may face longer travel times.

While diesel was sold at Chennai’s fuel stations for Rs 91.59 per litre on Saturday, government-run oil companies have increased the price of diesel for bulk users to around Rs 114 a litre. It may be recalled that when government bus fares were last hiked in January 2018, diesel was sold for Rs 65.50 per litre.

The hike in bulk diesel price would have increased the financial burden on the debt-ridden corporations by Rs 3.5 crore a day or Rs 1,277.5 crore a year. To avert this, on Sunday, transport department officials met with an oil company in Chennai and signed an agreement to purchase high-speed diesel for government buses at retail outlets at market price.

“As we placed an order for 16 lakh litres a day, the company agreed to provide a concession of 64 paise a litre. Thus, we have saved Rs 1.5 crore per day. We have also averted the additional expense of Rs 3.5 crore a day,” said a senior transport official. 

‘In 2013, govt buses would get stuck in traffic filling fuel’

Official data, obtained by TNIE, show, till March 2020, that fuel cost accounted for 35 per cent of the corporations’ operational costs. The figure rose to 53 per cent in February 2021 on the back of soaring fuel prices. The transport officials refused to divulge the latest data on debts and losses incurred by the corporations.

The last time transport corporations resorted to filling fuel at retail stations was in January 2013. The then Union government had introduced a dual pricing system in which diesel was priced higher by Rs 11.81 a litre for bulk users on the grounds that the fuel was used for commercial purposes by transport corporations and industries.

Then, Chief Minister J Jayalalithaa and Leader of Opposition M Karunanidhi, the DMK chief, opposed the decision stating public transport was a service, not a profit-making entity. Till the system was withdrawn months later, government buses filled diesel at retail fuel stations as a result of which travel time increased by 10 to 20 minutes.

S Rajan of Salem, a bus enthusiast, recalled during that period, State and Metropolitan Transport Corporation buses were operated at the whims and fancies of the drivers causing a lot of hardship to commuters. “During peak hours, buses were taken on detours to fill fuel and would end up stuck in traffic on highly congested roads,” he said.

The transport official said all efforts will be taken to ensure smooth operation of buses while fuel is being refilled at retail stations.

Jan 2013 experience
The last time transport corporations chose to fill fuel at retail outlets was in January 2013 after a dual pricing system was introduced in which price of diesel was Rs 11.81 more a litre for bulk users 


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