Friday, June 20, 2008

Railways to absorb impact of diesel price hike

by Jo Black

Indian Minister of Railways, Mr. Lalu Prasad has categorically stated said that in the wake of the recent diesel price hike, the Indian Railways will not pass the Railways’ additional financial burden on to its users – both Railway passengers and freight customers.

Lalu Prasad pointed out that Indian Railways consume 2.27 billion litres diesel per annum and an increase in the price of diesel by Rs. 3 ($0.07) per litre would cost Railways Rs. 6.81 billion ($170.25 million) annually and Rs. 5.60 billion ($140 million) for the remaining ten months of the current financial year.

He said that Railways have decided to absorb the diesel price hike by improving its productivity, efficiency and volumes.

Prasad said that all Zonal Railways have been directed to grant up to 50 per cent discount, as against the prevailing 30 per cent, for loading of essential commodities like cement, foodgrains, fertilizers etc. in the empty flow direction.

Further reduction in freight rates is also being examined keeping in view the competitive position of the Railways in the transport market so as to attract more traffic and increase earnings.

The Minister further said that Indian Railways have maintained price stability in passenger fares for the last four years.

Railways have in fact reduced AC-I fares by 28 per cent, AC-II fares by 17 per cent, AC-III fares upto 40 per cent in case of Garib Rath trains and second class fares by 5-25 per cent.

The introduction of Garib Rath has been a significant step in this direction which has made AC travel much more affordable for the common man.

In the freight sector too, a flurry of initiatives and discounts have attracted more and more customers which resulted in a record freight loading of 795 million tonnes during the year 2007-08.

 

 

 

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