The recent fuel price hike, especially of the diesel, will increase the expenditure bill for the Indian Railways by about Rs 250 crore (Rs 2.5 billion). This represents a 3 per cent hike over the budgeted operating expenses for fuel in the current fiscal.
The railways, however, do not have any plans to increase fares. Speaking to Business Standard, Railway Board chairman RK Singh said, "There are no plans to raise fares. We are going to absorb the impact of the fuel price hike".
Expenditure on fuel is budgeted at Rs 8,243.70 crore (Rs 82.43 billion), which is 25 per cent of the ordinary working expenses of the railways in 2004-05.
Any further price rise in fuel will raise the expenditure further. Operating expenses on fuel were budgeted at Rs 7,963.54 crore (Rs 79.63 billion) in 2003-04 and are budgeted 3.5 per cent higher at Rs 8,243.70 crore (Rs 82.43 billion).