Tamil Nadu's eight state-run transport corporations face an additional annual financial burden of nearly ₹175.58 crore after oil marketing companies raised high-speed diesel prices by ₹2.86 per litre, pushing an already loss-making public transport sector deeper into crisis. The development, reported on 16 May from Chennai, compounds years of mounting operational deficits across the state's bus network.

Scale of the Crisis

The affected undertakings — Metropolitan Transport Corporation (MTC), State Express Transport Corporation (SETC), and the six regional divisions of Tamil Nadu State Transport Corporation (TNSTC) — collectively run around 19,000 buses daily across more than 10,120 routes. These fleets consume an average of 16.82 lakh litres of diesel every day while covering nearly 81 lakh kilometres across the state.

According to Transport Department Secretary Shunchonngam Jatak Chiru, the corporations were already recording a combined daily loss of nearly ₹19 crore before the fuel price revision. The diesel hike is now expected to push daily operational losses up by a further ₹48.11 lakh.

Fuel Costs Already Dominate Expenditure

Officials noted that the transport corporations spend approximately ₹5,200 crore annually on diesel alone — accounting for around 26 per cent of total operating expenditure. The steady climb in losses is well-documented: average daily losses rose from ₹16.83 crore in 2022-23 to ₹17.7 crore in 2023-24, and further to ₹18.9 crore in 2024-25. The latest diesel hike threatens to accelerate that trajectory.

Fare Freeze Since 2018 at the Heart of the Problem

Transport workers' unions argue that the deepening financial strain is directly linked to the government's prolonged reluctance to revise bus fares in line with fuel costs. Ordinary bus fares in Tamil Nadu were last revised in January 2018, when diesel was priced at around ₹65 per litre. Diesel has since climbed to nearly ₹95 per litre — a rise of roughly 46 per cent — while fares have remained frozen.

Tamil Nadu's ordinary bus fare currently stands at just 58 paise per kilometre, with ultra deluxe services charging ₹1 per kilometre. By comparison, ordinary bus fares in neighbouring Karnataka and Kerala range between 75 paise and ₹1 per kilometre, with premium services charging between ₹1.20 and ₹1.68 per kilometre.

Ridership Paradox: Record Passengers, Record Losses

Despite the financial distress, Tamil Nadu continues to record the highest public transport ridership in the country. Average daily passenger usage has grown from 1.55 crore commuters in 2021-22 to nearly 2.05 crore in 2025-26. Around 70 lakh women travel free each day under the state government's Vidiyal Payanam scheme, which operates across 7,331 ordinary buses.

The network also serves a critical social function: state-run buses connect nearly 98 per cent of villages with populations exceeding 1,000, making them indispensable to rural mobility. The tension between keeping fares low for commuters and sustaining viable transport operations is now sharper than ever, with the diesel hike forcing a reckoning that successive governments have deferred.