State-run monopoly Indian Railways will not raise passenger and freight rates despite a steep increase in government-set fuel prices, Railway Minister Lalu Prasad Yadav said on Thursday.
The railways transport the bulk of ore, coal and petroleum products in the country, and any hike in rates would bump up prices and add to inflation that is currently running at 3-½ year highs.
It transported 795 million tonnes of freight in the year to March 2008.
The fuel price increase will cost the railways 5.6 billion rupees for the remaining ten months of the fiscal year to March 2009, the minister said in a statement."Railways have decided to absorb the diesel price hike by improving its productivity, efficiency and volumes," Yadav said.
The government-set retail price of diesel, the fuel used in trains, was hiked by 9.5 percent, or 3 rupees a litre, on Wednesday. The railways consume 2.27 billion litres of diesel annually, Yadav said.The railways would look at reducing freight rates further to compete against trucks and boost earnings by gaining more traffic, Yadav added.
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