Low fuel rate may not cut rail fare

Reduction in diesel price is unlikely to be passed on to rail passengers as the cross- subsidisation burden on passenger service is still hovering around Rs 26,000 crore.

“It is true that diesel prices have come down two/three times in the last few months but it has not happened beyond that in the entire year. Passengers are already getting benefits as passenger fare is subsidised,” Railway Minister Suresh Prabhu said on Monday when asked whether reduction in fuel cost will reflect on the next fuel adjustment component (FAC) — linked fare revision.

“Freight earning is 2/3rd of total railways earning and 1/3rd is from passengers. Passenger service is cross- subsidised from freight earning,” Prabhu said during an informal interaction with reporters here.

FAC-linked fare revision, which was due in December, will now be effected in the upcoming Rail Budget in February. However, though diesel cost has come down, the energy bill has gone up by more than four per cent due to the hike in power tariff by state electricity boards.

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