Print Edition - 2015-02-07 | MONEY
Transport fares to be cut, but not by much
Feb 6, 2015-
The government has been preparing to slash transport fares in line with plunging gasoline prices, but officials at the Department of Transport Management (DoTM) have hinted that there won’t be any drastic cuts. They said that a decision on adjusting fares would most likely be made on Sunday.
An official said that transportation fares might be reduced by 2-3 percent. “Obviously, fuel prices have gone down, but the cost of almost all the other items used in operating a vehicle has gone up over the years,” said the official, adding that there was not much space for substantially decreasing the fare.
“There may not be big changes in ticket prices for short-haul urban routes, but travellers on long-haul routes will get some relief,” the official said.
According to the DoTM, fuel accounts for 35 percent of vehicle operation costs, and the fare adjustment will be made in line with the weight of fuel in the overall expenses.
The salaries and allowances of drivers, support staff and ticketing staff, garage rentals, government taxes, vehicle insurance premiums, the cost of engine oil, lubricants and tyres and maintenance costs, among others, make up 65 percent of vehicle operation costs, according to the government’s calculation.
On December 24, 2014, the DoTM had made a slight downward fare adjustment. Since then, the cost of diesel has gone down by Rs 3.50 per litre. The price of petrol has dropped by Rs 4.50 per litre over the same period.
Nepal Oil Corporation (NOC) has been implementing an auto pricing mechanism for petroleum products since September 29, 2014.
Gasoline prices have been reduced several times since then while there has been no change in transport fares as expected.
Compared to the price in September, diesel is now cheaper by Rs 18.73 per litre while petrol is cheaper by Rs 24.60 per litre. As per the latest price adjustment, diesel costs Rs 86.50 per litre while petrol costs Rs 109 per litre.
On Friday, the DoTM and transportation entrepreneurs agreed to adjust fares to match the drop in petroleum prices, according to officials. “We talked about the issue with the transportation entrepreneurs and they seemed to be positive,” said Madhu Sudan Burlakoti, director general of the DoTM.
“The meeting could not reach a decision as some of the transport association members were not present.” According to Burlakoti, the transportation entrepreneurs have said that they will hold an internal meeting and then prepare themselves to bring down fares.
Published: 07-02-2015 10:06