The sudden increase in diesel prices by Rs 5 a litre will hit the AP State Road Transport Corporation (APSRTC), which is already reeling under accumulated revenue losses.
The APSRTC officials said the hike would place a burden of Rs 340 crore per year on the corporation.
Though they contemplate to increase the fares, they wonder whether the government would give the go-ahead signal.
“We have to increase the fares at least by 10 percent to recover the losses. The hike would get an additional income of Rs 600 crore per year to RTC,” said an official.
The APSRTC consumes 56 crore litres per year and spends Rs 2,250 crore on diesel per year, in addition to Rs 400 crore paid as sales tax to the government. The last hike was brought in 2001 when the fares had gone up by 10 percent that resulted in an income of Rs 350 crore.
The increase in diesel prices has come as a big shock to RTC management as it incurs a loss Rs 4000 crore a year, said an RTC official.
“The government is imposing 14 percent sales tax on aviation fuel, but when it comes to the RTC, the VAT is charged by 22.5 percent,” the official said.
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