The Minister of Railways Shri Pawan Kumar Bansal has announced the implementation of Fuel Adjustment Component (FAC)- linked revision in only freight tariff from 1st April 2013. As regards passenger fares, since these were revised only in January this year, the Ministry does not indent to pass on the additional burden to them now and railways will absorb the impact of Rs 850 cr on this account.

While presenting Rail Budget for 2013-14 in Parliament today he said that in the Budget 2012-13, his predecessor had proposed to segregate fuel component in tariffs as FAC. As then suggested he proposes that this component be dynamic in nature and change in either direction with the change in fuel cost, say twice a year.

MKP/SK/SK

(Release ID :92517)

Fuel-linked tariff adjustment: freight rates to be dynamically adjusted for fuel-cost changes, passenger fares unaffected. Implementation of a Fuel Adjustment Component will make freight tariffs responsive to fuel-cost changes from 1 April 2013, with the FAC as a segregated, dynamic element adjusted periodically (for example, twice a year) to reflect fuel-price movements while passenger fares remain unchanged and the Ministry absorbs the additional fuel-related burden for passenger services.