Punjab Inks MoU with IOC for Diesel Supply to Government Buses, Saving ₹90 Crore Over Five Years
Punjab Government Signs MoU with IOC to Supply Diesel to Buses, Saving ₹90 Crore
Chandigarh, March 13, 2025 – In a strategic move aimed at fiscal prudence and efficient management of public resources, the Punjab government has signed a Memorandum of Understanding (MoU) with the Indian Oil Corporation (IOC) to secure the supply of diesel for Punjab Roadways and PUNBUS buses for the next five years. The MoU, signed in the presence of Punjab Transport Minister S. Laljit Singh Bhullar, is expected to generate significant savings for the state exchequer, amounting to Rs.90 crore over the agreement’s duration.
Agreement Details and Savings
During the MoU signing ceremony at Punjab Bhawan, Minister Laljit Singh Bhullar briefed the media, highlighting the financial benefits of the agreement. Bhullar stated that the deal would save Punjab a substantial amount, approximately Rs 9 crore annually, amounting to Rs. 90 crore over five years. This initiative is a reflection of the state’s commitment to efficient resource management and fiscal responsibility.
The MoU was exchanged between Sh. Rajiv Kumar Gupta, Director of State Transport and Managing Director of PUNBUS, and Ashutosh Gupta, Executive Director and State Head of IOC. Bhullar emphasized that the agreement had resulted in increased discounts on diesel prices, benefiting the state’s public transport services.
Diesel Price Discount and Savings Breakdown
The agreement secures a discounted diesel price of ₹2550 per kiloliter, a significant improvement over the previous contract signed in 2019, which provided a discount of ₹1980 per kiloliter. According to Bhullar, this new pricing structure will generate ₹9 crore in savings annually for Punjab Roadways. Additionally, the government is in the process of signing a similar MoU with the Punjab Road Transport Corporation (PRTC), which is expected to generate an additional ₹9 crore in savings annually. These cumulative savings will contribute to the overall ₹90 crore savings over the next five years.
Chief Minister Bhagwant Mann’s Focus on Fiscal Responsibility
Minister Bhullar also attributed this initiative to the proactive leadership of Chief Minister Bhagwant Singh Mann, who has been prioritizing fiscal responsibility and efficient utilization of resources. “The Punjab government is committed to providing safe, comfortable, and secure travel for passengers while simultaneously ensuring efficient resource management,” Bhullar said.
This agreement with IOC aligns with the government’s ongoing efforts to improve the financial health of Punjab Roadways and PUNBUS, two of the state’s largest public transportation systems. The savings generated from the deal will be used to further enhance passenger services, including better maintenance, improved facilities, and the introduction of new services.
Long-Term Benefits for Punjab Roadways and PUNBUS
The diesel supply agreement is part of a broader transportation strategy aimed at improving the efficiency of the state’s public transportation infrastructure. PUNBUS, which is a key player in transporting passengers across Punjab, will directly benefit from the savings generated by the discounted diesel rates. By reducing the fuel expenditure, the government can channel those funds into upgrading bus fleets, improving safety standards, and expanding services to underserved areas.
Minister Bhullar stressed that this decision reflects the Mann government’s commitment to enhancing the quality of services for public transport users while ensuring that public funds are used efficiently. “This MoU is a significant step towards providing high-class, passenger-friendly services while saving valuable public resources,” Bhullar noted.
Broader Impact on Punjab’s Transport Policy
The Punjab government’s transport policy has evolved over recent years to focus on cost-effective solutions, sustainable energy use, and enhanced services for passengers. The signing of the MoU with IOC is a milestone in these efforts, ensuring that public transport in the state remains affordable and efficient.
The agreement also positions Punjab as a forward-thinking state when it comes to the management of state-owned transportation. By entering into long-term agreements like this one, the government is laying the groundwork for future fiscal stability and better service delivery in the public sector transport system.
Looking Ahead: Continued Focus on Public Welfare
Minister Bhullar reaffirmed that this initiative is just one of many steps the Punjab government is taking to improve the lives of its citizens. He added that CM Bhagwant Singh Mann’s administration is fully committed to ensuring that Punjab Roadways and PUNBUS continue to provide reliable, comfortable, and cost-effective services to the people of Punjab. “We are continuously working towards ensuring that public transportation remains a cornerstone of safe and efficient travel in the state,” Bhullar said.
In the coming months, the Punjab government will continue to roll out initiatives aimed at improving infrastructure, reducing operational costs, and ensuring sustainable transport solutions for the people of Punjab.