The Centre has ruled out any increase in the passenger fare due to the rise in the diesel prices.
R Velu, minister for state for railways, said the government would not pass on the extra burden to the common man.
"There is no proposal from the ministry to raise fares," Velu said in a press meet in Kolkata on Tuesday.
Railways is the largest consumer of diesel in the country.
It spends about Rs 4,000 crore (Rs 40 billion) on account of diesel every year.
With the rise in retail prices of about Rs 2.20 per litre on November 4, Railways would have to spend another Rs 250 crore (Rs 2.50 billion) on account of diesel.
Observers feel the fare has been frozen despite increase in the oil bill due to political consideration.
The assembly poll in Bihar, the native state of Railways minister Laloo Prasad Yadav, will take place in early 2005 and a fare hike at this stage may not go down well with vote banks.
Moreover, there is a possibility of partial rollback in diesel price with Left parties mounting pressure. Thus the railways is taking a wait and watch policy.
Passenger fares have been kept largely unchanged in the last two interim railway budgets.Velu said the government has been providing cross subsidy to take the pressure off passenger traffic.
He argued that the freight rates were still attractive compared to other modes of transport. "One should not compare global standards. Railways is still cheaper in India and people are using it," he pointed out.
A survey has been launched to examine the possibility of increasing the Metro rail fare in Kolkata.
"It is making huge losses. We have to see how this could be contained. A survey is on to see how much the fare could be hiked without hurting passengers," Velu said.
Metro Railway posted Rs 41 crore (Rs 410 million) loss in the last fiscal to earn revenue of Rs 50 crore (Rs 500 million). Last year 90 million passengers rode the Metro. This year it is expecting 95 million passengers to avail the underground rail.