(Gerald Martineau/THE WASHINGTON POST)

Virginia Railway Express officials have proposed hiking rail fares an average of 3 percent as the agency deals with a host of increasing costs.

The Virginia Railway Express Operations Board has asked its member localities to examine a proposed $88.7 million Fiscal Year 2013 budget that anticipates fewer dollars from the state and federal governments and an increase in fuel prices, said VRE spokesman Mark Roeber.

Roeber said the local leaders will examine the proposal and return their assessments. VRE plans to hold public hearings at the end of March before its final budget – and any potential fare increases – go into effect.

While the agency has not yet broken out what the proposed increases could mean for riders across nine zones, a 3 percent increase in a ticket from Fredericksburg to the District would add about 30 cents to the fare, Roeber said.

Increasing costs, according to Roeber, come from a number of areas:

• A projected increase in fuel costs from a budgeted $2.70 to $3.25 per gallon means another $790,000 is needed. The agency is now paying $3.30 and officials believe the price will head down slightly going into next year.

• A contract with vendor Keolis, which handles VRE’s personnel, calls for a cost of living increase for employees of 3.5 percent, or $710,000 to VRE.

• As many employers move from SmarTrip reimbursements to other forms of transportation subsidies, VRE is using a contractor called Commuter Direct. Because of the change across the D.C. region, the company is expecting to charge VRE more in commission. VRE officials are projecting they will need an additional $670,000 to pay the increase.

VRE also says 20 of its rail cars are more than 50 years old and must be rehabilitated at a cost of $320,000.

VRE’s projected budget could be affected if the federal or state government changes how much it plans to give the agency, Roeber said.