Diesel rate hike incur loss to railways

Diesel dent in rail kitty

By Our Special Correspondent | www.telegraphindia.com 

New Delhi, March 4: Indian Railways will incur a revenue loss of Rs 300 crore annually because of last week's hike in bulk diesel prices by Re 1 per litre by state-owned oil firms.

However, railway minister Pawan Kumar Bansal today ruled out any immediate hike in freight rates or passenger fares.

"The Re 1 hike in diesel will cost railways an additional burden of Rs 300 crore annually. But we are not going to revise the freight rates or passenger fares for this hike," Bansal said on the sidelines of a seminar here.

The railways proposed a fuel adjustment component (FAC)-linked hike of about five per cent in freight rates in the budget. The proposal calls for a review in FAC twice a year.

Passenger fares were hiked in January by 21 per cent after a decade. Keeping the base fare intact, the rail budget, however, tweaked some charges such as reservation fees, cancellation charges and tatkal reservation fees.
The market pricing of diesel by oil companies for bulk purchasers, including the railways, has resulted in the transporter increasing the budget allocation for fuel by Rs 4,744.75 crore to Rs 26,474.23 crore in 2013-14.
Bansal had announced a fuel surcharge of 5.8 per cent on freight traffic to balance his books.
The across-the-board hike in freight charges can net up to Rs 4,200 crore a year, while raising passenger reservation and related charges can bring in another Rs 483 crore.
About 250 crore litres of diesel are consumed by the railways to operate 70 per cent of its 65,000km route.
The cross-subsidisation in Indian Railways is so huge that it earns 30 paise for carrying a passenger for a kilometre, while it gets Rs 1 per km for carrying a tonne of freight.