Provide diesel to KSRTC at existing market rate: Kerala HC to oil firms

The court said: “Whatever be the mechanism adopted by respondent oil firms in fixing the rates for bulk supply to consumer pumps, prima facie the price levied is highly exorbitant. If it is in pursuance of any agreement, the same prima facie is an extremely unconscionable term of bargain.’’

Initially, the consumer pump rate was lesser than the Retail Outlet (RO) price for diesel. Since February, 2022, the oil firms have been levying a much higher rate. At present, the price of high-speed diesel to other consumers is about Rs 91.72 per litre, whereas KSRTC is required to pay at the rate of about Rs 121.35 per litre. KSRTC, which is in a severe financial crisis, requires 300 to 400 kilo litres of high speed diesel per day.

In its petition, KSRTC pressed for an interim order to levy price for high-speed diesel at par with existing market rate available for retail outlets. The oil firms resisted the demand for interim order saying that KSRTC petition is not maintainable as the issue involved is within the realm of contract and there is an arbitration clause in the agreement. Subsidy and concession are matters of policy and the court shall not interfere, argued the oil firms.