Oil freight still eludes railways

The Railways have drawn a blank from Reliance, Hindustan Petroleum and Bharat Petroleum in their efforts to make these companies use the rail network to transport their products.

"We have been talking to the oil companies but none of them have shown any enthusiasm to the Budget initiatives," a rail official told Business Standard.

He said the Railways had been holding meetings with these companies on a monthly basis in 2003-04, but despite the efforts there had been a steady dip in revenue from petroleum oil and lubricants (POL) freight.

In October, the latest month for which data is available, only 2.50 million tonne (MT) of POL was hauled against 2.87 MT in October, 2002, which is a decline of 12.9 per cent.

The earnings for the month dipped by 8.94 per cent to Rs 203.65 crore compared with Rs 223.64 crore last year.

Up to October this fiscal, total POL freight has declined 10.75 per cent compared with the corresponding period last year. In terms of earnings, the dip is as much as 12.27 per cent.

This year's Budget had reduced the petroleum freight rate by 10.7 per cent. As an added measure, Rail Minister Nitish Kumar said that long-term agreements with individual oil companies would be considered for further reduction in freight rates if they guaranteed additional traffic for rail movement instead of using pipelines and roads.

So far in the fiscal, total traffic hauled by the Railways has gone up 7.02 per cent, while earnings registered a marginal increase of 1.49 per cent.

Even though the freight traffic target for the year, 540 MT, looks well within reach, earnings will fall short of the target.

This is because of decline in the revenue yield per MT of freight for all types of cargo except foodgrains, where there has been an increase of 1.79 per cent from last year.

Incidentally, POL has registered the lowest fall in yield per MT of just 1.79 per cent to Rs 77.24 crore.

Not chugging ahead

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• In October, the latest month for which data is available, only 2.50 million tonne (MT) of POL was hauled against 2.87 MT in October, 2002, which is a decline of 12.9 per cent. The earnings for the month dipped by 8.94 per cent to Rs 203.65 crore compared with Rs 223.64 crore last year.
  
• Up to October this fiscal, total POL freight has declined 10.75 per cent compared with the corresponding period last year. In terms of earnings, the dip is as much as 12.27 per cent.
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  So far in 2003-04, total traffic hauled by the Railways has gone up 7.02 per cent, while earnings registered a marginal increase of 1.49 per cent