After robbing the poor to pay Railways, Govt re-robs latter
19 Jan 2013 6:23 AM IST
When the Manmohan Singh-led Union government announced a hiked in passenger rail fares on 9 January in a way that will severely hit the millions of poor in India, it claimed that the blatantly anti-people measure was essential as it would earn additional Rs 6,600 crore revenues a year for the ‘cash-strapped’ railways.
But just eight days after that (Thursday 17 January), the same government carried out what was essentially outright deregulation of diesel by allowing state-owned oil marketing companies (OMCs) to carry out ‘small increases’ in its price from time to time until the total diesel subsidy is wiped out.
This latest decision will put an additional burden of around Rs 2,700 crore a year on the cash- strapped Railways, a senior official said on Friday.
Thus, less than 10 days after ordering the fleecing of the poor ostensibly to help Indian Railways earn Rs 6,600 crore a year, the government has struck a decisive blow to shave off Rs 2,700 crore from that amount. It is now clear that the government is not at all serious or sincere about financially helping Indian Railways.
‘We have to pay Rs 10.80 per litre more now as the bulk price of diesel has gone up,’ said the Railway Ministry official, adding, ‘The fuel bill will be about Rs 2700 crore more per year due the latest hike.’ The government had on Thursday allowed state-run oil majors to fix diesel prices on their own in order to reduce an expanding subsidy bill and budget deficit. Oil companies announced a dual price mechanism while hiking the rates.
While the retail consumer will be paying 50 paisa more per litre, for bulk consumers the hike is Rs 11 per litre. The national transporter paid about Rs 10,000 crore during the last fiscal towards its fuel bill, which has been rising every year due to increase in fuel cost.
The diesel hike comes at a time when Railways is facing an acute financial crunch. Earnings from passengers and freight have failed to meet the target in the current fiscal. The annual plan allocation has also been reduced from Rs 60,000 crore to Rs 51,000 crore this year. As per the government’s decision, bulk consumers such as Railways and state transport corporations will have to buy diesel at market prices.
The Railways procure about 250 crore litre per year from oil companies for its fleet of 4,500 diesel locomotives hauling both passenger and freight trains. The passenger fare hike will come into effect from 22 January.
The three oil PSUs — Indian Oil Corporation Ltd (IOCL), HPCL and BPCL — supply fuel providing a subsidy of 30 paisa per litre as the Railways is a bulk consumer of diesel. However, with the subsidy gone, the Railways will have to buy fuel at market rate which is likely to hit hard the national transporter.
But just eight days after that (Thursday 17 January), the same government carried out what was essentially outright deregulation of diesel by allowing state-owned oil marketing companies (OMCs) to carry out ‘small increases’ in its price from time to time until the total diesel subsidy is wiped out.
This latest decision will put an additional burden of around Rs 2,700 crore a year on the cash- strapped Railways, a senior official said on Friday.
Thus, less than 10 days after ordering the fleecing of the poor ostensibly to help Indian Railways earn Rs 6,600 crore a year, the government has struck a decisive blow to shave off Rs 2,700 crore from that amount. It is now clear that the government is not at all serious or sincere about financially helping Indian Railways.
‘We have to pay Rs 10.80 per litre more now as the bulk price of diesel has gone up,’ said the Railway Ministry official, adding, ‘The fuel bill will be about Rs 2700 crore more per year due the latest hike.’ The government had on Thursday allowed state-run oil majors to fix diesel prices on their own in order to reduce an expanding subsidy bill and budget deficit. Oil companies announced a dual price mechanism while hiking the rates.
While the retail consumer will be paying 50 paisa more per litre, for bulk consumers the hike is Rs 11 per litre. The national transporter paid about Rs 10,000 crore during the last fiscal towards its fuel bill, which has been rising every year due to increase in fuel cost.
The diesel hike comes at a time when Railways is facing an acute financial crunch. Earnings from passengers and freight have failed to meet the target in the current fiscal. The annual plan allocation has also been reduced from Rs 60,000 crore to Rs 51,000 crore this year. As per the government’s decision, bulk consumers such as Railways and state transport corporations will have to buy diesel at market prices.
The Railways procure about 250 crore litre per year from oil companies for its fleet of 4,500 diesel locomotives hauling both passenger and freight trains. The passenger fare hike will come into effect from 22 January.
The three oil PSUs — Indian Oil Corporation Ltd (IOCL), HPCL and BPCL — supply fuel providing a subsidy of 30 paisa per litre as the Railways is a bulk consumer of diesel. However, with the subsidy gone, the Railways will have to buy fuel at market rate which is likely to hit hard the national transporter.
Next Story
