Diesel price hike likely to hit railway fare too

Hard pressed for cash, the railway ministry is weighing two models for increasing passenger fare. The first one is increasing fares in proportion to fuel price hike, and the other is imposing higher fares on busy routes.

The move essentially means that every time there is a diesel price hike, train travel cost will also go up. According to railway ministry statistics, with every Re 1 hike in diesel price, the ministry has to meet an additional burden of 240 crore. It is this Rs 240 crore that will be distributed among the 19 lakh passenger who use the railways daily.

However, the ministry has not yet taken any concrete decision and railway minister Dinesh Trivedi has not come out with any specific date by when the new fare models will be implemented.Addressing the economic editors conference in New Delhi on

Wednesday, Trivedi said, “We need to do things intelligently. For health of the organisation, we have to look at various avenues. But we need to do things in a way that the poorest of the poor are not affected. We are considering whether fare hike can be related to fuel hike or be based on traffic on routes.”

For the railways, the decision is not going to be an easy one though. While the annual loss on account of passenger operations is pegged at Rs 14,000 crore, which is subsidised from the freight earnings, major passenger revenues come from unreserved passengers who are on the lowest strata of the society.

Trivedi said, “91 per cent of the revenue comes from people who travel in unreserved coaches. Same people pay seven times more in road transport. So can we implement hike in this class. It has to be seen. We have to take a logical decision.”