Government unlikely to raise railway fares

Government is unlikely to raise rail fares after new increase in prices of petroleum products due to immense pressure from the public as well as from the political parties, it is learnt. Sources in the Railway Ministry said that Pakistan Railways (PR) pays approximately Rs 18 billion per annum for fuel and the new increase in oil prices would further raise expenditure.
Talking to Business Recorder, spokesperson of the Railway Ministry Muhammad Saleem said that increase in oil prices would certainly increase the burden on Pakistan Railways. However, there is no proposal to raise rail fares, he confirmed.
Oil and Gas Regulatory Authority (Ogra) raised prices of petroleum products by 9.9 percent. Petrol price has been hiked by Rs 7.23 per litre to Rs 80.19; High Speed Diesel by Rs 7.76 to Rs 86.09 per litre; Light Speed Deisel made expensive by Rs 6.60; HOBC Rs 8.58 to Rs 95.25; and Kerosene Oil Rs 7 to Rs 77.95 per litre. Spokesperson further said that about 24 percent of the total deficit of PR is due to fuel expenditure. After new increase in oil prices, it would further increase PR deficit and it would become difficult for the Ministry to bear the expenditure.
Pakistan Railways raised fares by 10 percent for mixed/passenger trains, 15 percent in intercity trains, 20 percent in non-stop trains, 20 percent in parcel/luggage trains and 20 percent in freight trains from February 1, to meet additional expenses like salary raise in the budget 2010-11 along with increase in diesel and electricity tariff. After increase in rail fares, a bill has been approved in the National Assembly for discussion and the government has been asked to justify the increase.
Standing committee of the National Assembly on Railway in its last meeting recommended to the government to bailout Pakistan Railways from financial crisis and to write off Rs 40 billion loans outstanding against the railways. It also recommended that government should take immediate steps for steering the Pakistan Railways out of the current financial crisis and to waive over draft of Rs 4 billion with State Bank of Pakistan (SBP) or convert it in to equity of government of Pakistan.
However, the new increase in oil prices would take Railway's deficit to unsustainable level. Sources in the Ports and Shipping Ministry revealed that any change in ship fares are linked with the international market. There would be no effect of locally increased oil prices on ship fares.