Transport fares cut as fuel prices ease

- POST REPORT, Kathmandu
Transport fares cut as fuel prices ease

Dec 23, 2014-

The Airlines Operators Association of Nepal (AOAN) has slashed the fuel surcharge added to the price of a plane ticket in line with a drop in oil prices.

Fuel surcharges have been reduced by Rs 125 to Rs 390 depending on the distance, and the revised airfares will come into effect from Tuesday, the AOAN said Monday.  

Similarly, the government has decreased public transport fares and freight charges effective from Wednesday. Passenger fares have been cut by a nominal 1 percent while cargo rates have been slashed by 2.02 percent for Tarai routes and 2.73 percent for hill routes, said the Department of Transport Management. Taxi fares remain unchanged.

The public transport fares and freight charges have been revised as per the baseline fares fixed on March 8, 2013 when diesel cost Rs 99 per litre,” said Mukti KC, spokesperson of the department.

“The cut is nominal, but it is justifiable when seen in the light of the fact that passenger and cargo fares have not been revised for the last 21 months,” he said.

Earlier, the Ministry of Physical Infrastructure and Transport and the transporters had reached an agreement to raise public transport fares by 5.63 percent with effect from November 1, based on an agreement reached six months ago. But the plan was deferred when oil prices started to fall.

“If the rate demanded by transporters and the 1 percent hike made by the government are calculated, the cuts add up to 6.63 percent,” KC said.

Since September 28 when Nepal Oil Corporation (NOC) adopted an auto pricing mechanism, diesel prices have dropped Rs 13.23 per litre. When asked if the department would revise fares in line with the auto price adjustment of NOC, KC said it was not viable to do so.  

Airlines are required to slash the fuel surcharge when fuel prices drop by Rs 4 per litre as per an agreement made between the Civil Aviation Authority of Nepal (Caan) and the AOAN. They are allowed to increase the surcharge when fuel prices rise by Rs 4 or more per litre.

On December 19, NOC slashed the price of aviation fuel sold to domestic airlines by Rs 10 per litre to Rs 133 per litre. The state-owned oil monopoly makes a profit of Rs 41.78 per litre of aviation fuel sold to domestic carriers even after reducing the price.

“After repeated requests, NOC has finally revised aviation fuel prices, and travellers and carriers should feel some relief,” said Ghanashyam Acharya, spokesperson of the AOAN.

On December 5, the AOAN had given a 10-day ultimatum to NOC to enforce the auto-pricing system. Arguing that making hefty profits of more than 50 percent on aviation fuel was against the government’s Black Marketing and Some Other Social Offences and Punishment Act, 1975, the AOAN had warned that it would intensify protests if prices were not revised.

The corporation has been adopting a cross-subsidy mechanism by increasing aviation fuel prices to stabilize prices of other petroleum products.

Revised fuel surcharge

SECTOR                                 NEW FUEL             REVISED

                                              SURCHARGE              AIRFARE

Kathmandu to

Dhangadhi                            Rs 5,150                 Rs 11,405

Mountain flight                      Rs 4,985                 Rs 10,285

Nepalgunj                             Rs 3,905                 Rs 8,540

Bhadrapur                             Rs 3,655                 Rs 7,890

Biratnagar                             Rs 3,075                 Rs 6,845

Bhairahawa                          Rs 2,740                 Rs 6,000   

Pokhara                                 Rs 2,245                 Rs 4,645

Janakpur                               Rs 1,995                 Rs 4,100

Bharatpur                              Rs 1,745                 Rs 3,570


Published: 24-12-2014 09:38

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