Metro could equip its entire 101-mile subway system with token-operated turnstiles for less money than it will cost to buy the automatic fare-collecting equipment needed for the last 40 miles of the subway. Metro General Manager Richard S. Page said yesterday.

Furthermore, he said, ending the Farecard system in favor of turnstiles would mean an annual maintenance savings of about $13 million when the entire 101-mile Metro system is completed.

Page made those statements yesterday in his long-awaited report to the board on Metro's fare-collecting system. But Page, who has made no secret of his belief that the Farecard system is too complicated and unreliable, stopped short of recommending that the system be eliminated.

"It is a political issue," he said, as he handed his study to the politicians.

Page recommended, and the board yesterday appointed, a local government task force to study the possibility of s implifying Metro's complicated fares. The task force's starting point will be Page's report, which says that if the Farecard system is retained, about $8 million in modifications will be needed to make it work acceptably.

Subway riders regularly face out-of-order signs on ticket vending machines and balky entrance and exit gates. Tourists scratch their heads as they contemplate the machines and try to figure out the fares.

Metro has already spent $5.17 million for Farecarad equipment for the first 60 miles of the subway. Page estimated that it will cost $8 million to modify and simplify the existing equipment and an additional $21.7 million to equip the remaining 40 miles of the system.

Turnstiles and tokens, complete with token-vending machines, could be purchased for the 101-mile system for $21.4 million. Annual operating and maintenance on the technically complex Farecard system was estimated at $25.4 million. For the turnstiles, it was estimated at $12.1 million.

The major problems that the task force willl face are ones that Metro's local governments have been unable to resolve over recent years.

Maryland, Virginia and the District of Columbia have different philosophies on how much their transit riders should be subsidized. Virginia jurisdictions believe the rider should pay as much as possible.District representatives citing their large population of poor people, favor large subsidies, and Maryland falls somewhere in between.

The basic concept behind Farecard is that it is equitable: the short-trip rider pays less than the long-haul rider -- thus the inner-city resident does not subsidize the suburban commuter.

Metro's rush-hour fare is 55 cents for the first three miles and 11.5 cents for each mile after that. Most D.C. riders now pay 55 cents. Many Maryland and Virginia riders to downtown Washington pay 80 cents or $1.10 or $1.25.

"When it functions reliably," Page wrote in his report, "the present (system) implements whatever rail-fare structure best answers the varied and often conflicting goals of the region. But the public pays for that political flexibility. The complex system costs more in money and in patron complaints but makes possible a more equitable fare structure based on distance."

If a simple fare of 65 cents, for example, were adopted, it would mean that fares in effect would go up in the District and down for suburbanites. Furthermore, the complicated formulas by which Metro divides up the subsidy among eight local governments would have to be rejiggered in such a way that the District would appear to be handing subsidy money to suburban governments.

It would be possible with turnstiles and tokens to have a two-zone system: one token for boarding the subway in the District; two tokens for boarding in the suburbs.

The task force is also expected to address the question of transferring between bus and subway and how such fare issues could be handed.

In other business yesterday, the board approved the use of No. 2 diesel fuel for Metrobuses that operate from six garages, but retained the more expensive No. 1 diesel fuel for buses in the Northern and Western D.C. garages, both of which are located in residential areas.

A study for Metro showed that smoke and particulates would increase slightly with the switch to No. 2, but that hydrocarbons would decrease slightly. Hydrocarbons are the main ingredients in Washington's summertime smoke.