Sri Lanka railways fare hike not enough to recover fuel costs
ECONOMYNEXT – Sri Lanka’ state railways has seen a surge in demand after a collapse of the rupee pushed up costs of private transport, but the agency is still unable to recover fuel costs despite a fare hike, General Manager W A D Gunasinghe said.
In 2022 Sri Lanka’s rupee collapsed from 182 to 360 to the US dollar after two years of money printed to keep interest rates down for stimulus, driving up costs.
Sri Lanka’s rupee was 4.70 to the US dollar when the power to print money to manipulate rates was given to economists in 1950, and the people have not been able to take it away up to now by curbing open market operations by law. Instead legislators have given powers to the central bank and other bureaucrats to curb economic freedoms of the people with exchange and trade controls.
In 2021 Sri Lanka railways lost 10.3 billion rupees up from 10.05 billion rupees in 2020 according to central bank data. In 2022 fares were hiked to half that of buses under Transport Minister Bandula Gunewardene.
Sri Lanka Railways saw a surge in demand in 2022 as bus fares went up and fuel prices also pushed up costs of private transport but the agency was unable to recover fuel costs, not counting salaries and other expenses.
In May Sri Lanka Railways had earned revenues of 357 million rupees and fuel costs was 669 million rupees, leaving a gap of 312 rupees, Gunasinghe said.
In June after diesel prices were raised, fuel costs went up to 1.3 billion rupees 432 million rupees, leaving a loss of 868 million rupees.
In July revenues went up to 589 rupees and fuel cost was 1.3 billion rupees leaving a loss of 711 rupees.
In August revenues went up to 1,040 million rupees after a fare hike which was still more that 200 million rupees below the cost of fuel.
Minister Gunawardana said railways had properties which was occupied by various persons who were not paying rent on time.
“I urge people to pay at least part of the rent due to railways,” he said.
Recently after a meeting with users of railway property in Polonnaruwa with the participation of divisional secretaries and railway officials in a weekend, people paid 1.6 million rupees in rent arrears. (Colombo/Sept30/2022)
