Which is correct?
How much is the two fares?
How much are the two fares?
We say the two fares are XXX, so the question should be asked with are as well.
The construction how much is the two fares may be seen as an ellipsis of how much is the total of the two fares and I would avoid this in formal writing.
Both are possible in British English. The first is asking for a total, the second for two separate sums (though a hearer might not observe this distinction in answering).
Edit: limited to BrE.
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It seems to me that the technically correct answer is "is". You are asking for a total cost. There is only one total cost. A more formal way to ask the question would be, "How much is the cost for two fares?"
Jasper says that when you say it as a statement, we use "are", as in, "Two fares are $5." Yes, people often say it that way, but I've also heard people say, "Two fares is $5". Again, this is really short for, "The cost of two fares is $5". We're not saying that the two fares are something, we're talking about the cost of the fares.
I think what's happening here is that people are omitting words from the sentence for brevity, and then trying to apply the grammar rules to this truncated sentence.
For example, suppose someone asked you, "What color is the digit 'three' on that sign?" You might reasonably answer "The three is blue." But I wouldn't be surprised if someone carelessly said, "The three are blue", especially someone editing text after the fact without carefully reading the context.