Rail Budget 2013: Marginal impact on energy costs likely

NEW DELHI: The hike of nearly 6% in rail freight rates would have nominal impact on energy prices but would marginally increase input costs for power, cement and steel industries.
Once the new rates kick in from April 1, diesel freight would increase to Rs 1,041 a tonne, kerosene Rs 937.60 a tonne and cooking gas Rs 937.60 a tonne. But the actual impact would be slightly higher as the freight excludes development and busy season charges.
Senior executives, working with the three state-run fuel refiner-marketers, say the combined impact would be around Rs 500 crore a year. In terms of per litre cost of motor fuels, it would not be more than 5-10 paise.
About 33% of diesel, cooking gas and kerosene is moved through railways and the oil companies can pass on the higher freight or show it as under-recovery for the government to subsidize through Budget.
As far as electricity tariff is concerned, the impact would be about 3% at consumer end. In terms of actual hike, if any, the affect would be a rise of 1-3 paise per unit. This is because generation utilities would have to pay more for transporting coal. For country’s biggest generation utility, state-run NTPC, the impact is reckoned to be around 200 crore a year.
Steel and cement-makers too would face higher input costs which would almost certainly be passed on to consumers by way of marginal increase in retail prices. Freight on both cement and coal has been raised to Rs 724.80 per tonne. On iron and steel, freight has been hiked to Rs 1,541.50 per tonne. On iron ore (domestic), the freight has been raised to Rs 664 per tonne, while that on pig iron it would be Rs 773 per tonne.
Budget 2013 > Rail Budget 2013 > Economic Survey 2013