President Kenyatta made the directive on the charges as he flagged off the passenger train on Wednesday
Kenya Railways had initially announced a Ksh900 ($9) fare for the economy class and Ksh 3,000 ($30) for the business class.
Passengers travelling between Nairobi and Mombasa on the Standard Gauge Railway (SGR) train will pay Ksh700 ($7) on the economy class, President Uhuru Kenyatta has announced.
President Kenyatta made the directive on the charges as he flagged off the SGR passenger train dubbed Madaraka Express on Wednesday.
Cargo charges will not exceed Ksh50,000 ($500) per container, he said.
Kenya Railways had initially announced a Ksh900 ($9) fare for the economy class and Ksh 3,000 ($30) for the business class.
Top Chinese and Kenya government officials attended the launch of the SGR train in Mombasa, on Kenya's Coast.
The President and First Lady Margaret Kenyatta, along with other government officials, diplomats and other Kenyans from all walks of life, are riding on the train from Mombasa to Nairobi in an inaugural trip.
The Ksh327 billion ($3.27 billion) Standard Gauge Railway is a flagship project of President Kenyatta's administration.
On Tuesday, President Kenyatta flagged off a cargo train at the Mombasa port’s second container terminal. The ceremony was attended by officials from China Communications Construction Company and Exim Bank.
“This is a historic moment we are witnessing today because this project will transform the economy of this country and all Kenyans,” he said.
China provided loans that were used to construct the railway, a Vision 2030 flagship project, and its companies built the line and supplied locomotives.