Transportation fare won't go down despite 21% drop in diesel price
KATHMANDU, August 4:
Despite drop in fuel prices, the government seems to be in no mood to slash transportation fare anytime soon.
While the price of diesel fell down by 21 percent to Rs 84 per liter on Monday since mid-March last year, the government has said that it does not plan to review public transportation fare immediately.
Citing a rule as per the 'Scientific Fare Adjustment System', officials of Department of Transportation Management (DOTM) said that it would not reduce public transportation fare. According to the rule, transportation fare is revised if the diesel price goes up or down by Rs 5 per liter.
"The reduction of fuel price on Sunday will not make any changes in the transportation fare. The price should fluctuate by at least Rs 5 per liter to make any revision on existing transportation fare," Madhusudhan Burlakoti, director general of DOTM, told Republica.
The government had last revised transportation fare on February 9. However, the decision to slash transportation fare by Re 1 instead of the government-decided Rs 2 from Rs 15 per four kilometers was agreed by the transportation entrepreneurs for implementation only in the first week of March.
The price of petroleum products is falling continuously since March 14 last year. The price of diesel which was Rs 109 per liter has fallen down to Rs 84 on Monday after Nepal Oil Corporation slashed price of diesel by Rs 2.5 per liter on Sunday.
According to Scientific Fare Adjustment System, the fare of public transportations is revised in two ways. If the price of diesel goes down or up by Rs 5 per liter, public transportation fare is revised accordingly. Similarly, the government revises public transportation fare annually following the formula of 'cost analysis chart'.
"There are 14 indicators including cost of insurance, salary/allowance of drivers/staff, garage and space, maintenance, battery, depreciation, petroleum products and profit of operators, among other indicators. The changes of the cost for these indicators are collected through market survey. We put these costs in the formula based on the weightages of these indicators and prices are revised accordingly," Burlakoti explained the process of fare revision.
He said that they will soon start market survey to collect the cost of these indicators. "We will soon conduct the survey and make decision on the fare revision based on the result of the formula," he said. "Reduction of diesel price by Rs 2.5 per liter alone won't be sufficient to adjust transportation fare."
Sources at DoTM, however, warn that transportation fare might go up soon instead.
"Though price of petroleum products has come down, other costs in the Cost Analysis Chart like insurance, lubricant, maintenance and battery, among others, have gone up. The fare may go up after the market survey is done," a leader of public transport operators told Republica, preferring anonymity.
Federation of Nepalese National Transport Entrepreneurs' General Secretary Saroj Situala said it is up to DoTM to call the shot on transportation fare. "We will follow the decision of DoTM," he added.
Source: Republica
