Railway Ministry has approved a proposal to implement Fuel Adjustment Component in passenger fare for long distance mail and express trains. After this fares for this segment of trains would go up in the average of about two per cent. Similarly, freight charges would also increase by about 1.7 per cent.
An announcement to this effect is expected next week. “Our input cost has gone up significantly. The Diesel bill has increased by 7.31 per cent and electricity charges by 15 per cent. The FAC is linked to fuel prices and so the increase had to be brought about. Still we have excluded the urban and sub-urban services. We have tried to keep the hike as minimum as possible,” a top Railway official told The Pioneer.
Nearly 30 per cent of passenger fare consists of the fuel component. FAC is a variable component, which is reviewed twice in a year considering fuel prices. The Railway expects to raise additional 450 crore from passenger fare and another Rs 750 crore from freight after this hike is implemented.