RailEnquiry

New Delhi : A decision on a possible hike in passenger fares will be taken by the railways in October when it will review the fuel adjustment component (FAC) in the wake of rising fuel and energy costs. While the freight rate will go up about 5.7 per cent from April because of the linking of FAC in the freight tariff, the railways will examine its impact on passenger services in October. "There is a policy now and the FAC is linked with energy and fuel prices and calculated accordingly," Railway Board chairman Vinay Mittal said. According to calculations, passenger fares could go up 2-3 per cent if the FAC is linked to the basic fare in passenger services. "The fuel adjustment component will be reviewed after six months for both freight and passenger fares. Whether the FAC will be reduced or increased, it will be examined in October and then only a decision will be taken," Mittal said, adding, "by that time the Rail Tariff Authority is also expected to be constituted". The Rail Tariff Authority will suggest the level of tariff for both freight and passenger fares from time to time taking into account the input costs and volatile market conditions. Mittal said at present the authority was in an inter-ministerial consultation stage and a cabinet note would be prepared soon. "The FAC for passenger and freight are calculated separately. While we decided to link FAC with freight tariff from April, we absorbed the increased fuel cost of Rs 800 crore and did not hike passenger fares," he said. "Since we have raised the passenger fare in January, we did not consider it again and the FAC was implemented in the freight rate only," he said. On whether the FAC will be imposed in October, Mittal, however, said "I am not in a position to say that now because it will be reviewed and then a decision will be taken."