Bansal proposes to link freight to fuel adjustment charge

Last Updated: Tue, Feb 26, 2013 11:00 hrs

New Delhi, Feb 26 (IANS) Railway Minister Pawan Kumar Bansal Tuesday proposed to implement a fuel adjustment component (FAC)-linked charge on freight starting April 1, to offset the increase in diesel and electricity prices for the national transporter.

"In the light of deregulation of the HSD oil (diesel), railways' finances need to be rationally insulated, and to this end a mechanism to neutralise the impact of fuel prices on operating expenses is required to be put in place," Bansal said presenting his maiden budget in the Lok Sabha.

"It is proposed to implement the FAC-linked revision in only freight tariff from 1st April, 2013."

Bansal said he expected the FCA to be dynamic and that it should increase or decrease with same effect as the fuel prices.

"I propose that this component be dynamic in nature and change in either direction with the change in fuel cost, say twice a year."

Bansal also pointed out that the increase in diesel prices in January 2013, has added Rs.3,300 crore to the fuel bill of railways. The increase in fuel bill during 2013-14 on account of these current revisions alone would be more than Rs.5,100 crore.

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