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Railways may hike fares to pass on the burden of higher fuel costs to passengers
Posted on: 04/Oct/2013 11:15:10 AM
Fuel costs have gone up for electric trains by 16 per cent and for diesel trains by 7 per cent since April 1.
“A fuel adjustment component (FAC) was announced in the budget and according to the budget proposal, it should have been implemented from October 1. The FAC proposal has come to me and I am examining it and a decision will be taken shortly,” railway minister Mallikarjun Kharge said.
FAC is linked to fuel and energy prices and kept separate from base rates.
The railways will have to bear a burden of Rs 1,200 crore because of increased energy and input costs in the next six months. All this will add to the discomfort of travelers, who are trying to come to terms with higher air fares.The railways use coal, diesel and electricity to run its locomotives. Its fuel costs have increased because of the rise in the prices of crude oil and imported coal and the devaluation of the rupee.
About 250 crore litre of diesel is used to operate 70 per cent of the railways’ 65,000km route. From January, the transporter is buying diesel at market prices following the government’s decision to decontrol the fuel for bulk buyers.
The earnings of the railways during April-August increased 10.29 per cent to Rs 54,462 crore compared with the corresponding period last fiscal. Freight revenue during the period increased 8.86 per cent to Rs 37,085 crore, while passenger revenue rose 13.48 per cent to Rs 14,758 crore.
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