The Railways have decided to absorb the hike in diesel prices for bulk purchasers and not pass it on to passengers and freight customers.
Railway Minister Pawan Kumar Bansal on Monday ruled out any hike in freight and passenger fares in the wake of oil marketing companies raising diesel prices by Re. 1 per litre for its bulk purchasers.
In his budget proposals, Mr. Bansal raised freight charges by almost 5.79% across the board to raise Rs. 4,200 crore during 2013-14 to offset the estimated rise in its fuel bill by Rs. 5,100 crore. He passed on the entire burden on the consignors.
He, however, absorbed the estimated hike on the passenger segment of about Rs. 800 crore though he had more than made it up by raising other charges, including reservation fees and surcharge and clerkage charges and tatkal booking rates, which together are expected to yield Rs. 850 crore in the next fiscal.
The Re. 1 hike in diesel prices is expected to put an additional annual burden of Rs. 300 crore on the Railways during the next financial year.
The Railways suffered a burden of Rs. 3,300 crore due to a hike of Rs. 10.8 a litre for diesel for bulk purchasers in January.
Taking into account the hike in electricity charges, the Railways have estimated their fuel bill to go up by Rs. 5,100 crore.
The fresh hike in diesel prices will push the bill up by Rs. 5,400 crore, but Mr. Bansal told reporters that there would be no fresh hike in fare and freight prices.
The proposals he announced in Parliament need to be ratified by both Houses of Parliament and a mid-way revision would necessarily need to be first moved in Parliament.
Mr. Bansal also declared that the Ministry would review the situation to adjust the fuel component on a six monthly basis.
Source - The Hindu