Railways to study impact of Diesel price hike, yet to take a call on passing it on to users

NEW DELHI: The Railways will review the impact of fuel price increase and its pricing strategy.

A Railway Ministry official said the national transporter is yet to take a call on whether it will absorb the entire increase in diesel costs or consider passing them.

The Railways is the single largest transport fuel consumer and had projected a fuel bill of 27,200 crore for the present financial year (FY19). Of this, 10,000 crore is projected for electric traction and remaining 17,000 crore for diesel.

The Railways is adopting electrification at a faster pace to lower the total fuel costs.“While it is difficult to gauge the trend, in the present fiscal, going by the present trend, the Railways expects 1,000-1,500 crore impact for the entire fiscal,” said a source.

Although the official maintained that there is nothing political about the decision to hold back passenger and freight tariff hikes, industry observers point out that the rail tariffs are always political and freight has a cascading inflationary impact that the Centre may want to avoid while going into an election year. The official was speaking at the sidelines of an event to mark the launch of Rail Sahyog, a Web portal to aid the spend of Corporate Social Responsibility Fund for bettering the rail service infrastructure.

Coal sector

As regards coal, which is the largest source of revenue for the Railways, a Coal Ministry official present at the event said some progress can be also expected in the coal sector. After a one-year break, the Ministry of Coal hopes to auction coal blocks again. “We hope to hold another round of coal block auctions in the current financial year. The last round of auction did not elicit much response from participants,” the official said.