Fuel Price Reduction May Lower Road Transport Fares; What About Airfare?
Image Source, BBC/SHARAD KC
Published
Reading time: 3 minutes
Following Nepal Oil Corporation’s reduction of fuel prices effective from midnight, the government is preparing to adjust public transport fares accordingly.
According to Director Maniram Bhusal of the Department of Transport Management, the fare rates are adjusted automatically based on changes in fuel prices.
“We are currently calculating based on that system; an announcement will be made by evening,” Bhusal said.
He added that 13 indicators form the basis for adjusting fare rates.
“Adjustments consider factors such as vehicle purchase investments, driver and operator expenses, maintenance, insurance, fuel costs, and profits,” he explained. “A fare adjustment is triggered only when fuel prices decrease by more than 5 percent, hence the current adjustment after such a drop.”
Responsibility for Previous Calculations When Prices Decrease
The department generally adjusts fares for inter-province public transport and freight vehicles.
Previously, on the 16th of Baishakh, the department had increased fare rates by 5 percent.
The recent conflicts between the US and Israel with Iran leading to increased fuel prices in the Middle East also affected Nepal.
Director Bhusal mentioned that fare rates should have risen by 9.8 percent at that time.
“Due to the exceptional situation, the ministry approved only a 5 percent increase, so this time the fare might also decrease significantly,” he said. “We’re completing calculations and will issue the announcement by evening.”
Fare adjustments were also made on 25th Chaitra 2082 BS, resulting in a 16.71 percent hike for passenger vehicles, 21.68 percent for hilly freight vehicles, and 15.75 percent for Terai freight vehicles.
A diesel price increase of 55 NPR per liter later prompted a 5 percent fare adjustment in Baishakh.
Currently, the corporation has reduced diesel prices by 30 NPR per liter in one go.
Former President of Nepal Truck Transport Entrepreneurs Federation, Arjun Ranabhat, stated that fares have not increased proportionally to fuel price hikes.
He claims that the phased fuel price increase due to Middle East conflicts is still significantly higher than before the price changes.
“Though prices have dropped by 30 NPR now, fuel remains more expensive than before,” Ranabhat said, “But we agree to the automated adjustment system, so we will accept if the government enforces the decrease.”
Province-Level Adjustments: What About Kathmandu?
The fare rates for vehicles operating within provinces are determined and adjusted by the respective provincial governments.
Especially in Kathmandu Valley, where thousands rely on public transport, there is considerable interest in fare adjustments.
Sagar Bikram Basnet, Provincial Program Coordinator and Information Officer at the Ministry of Labour, Employment and Transport of Bagmati Province, said no discussions have taken place at the ministry yet.
He anticipates decisions will follow once fuel prices stabilize.
“The Middle East conflict continues to affect fuel prices, and uncertainty has not been resolved,” he stated. “If minimal fluctuations occur and prices remain roughly stable, necessary adjustments will be implemented.”
Some have expressed dissatisfaction that Nepal Oil Corporation did not adjust fuel prices in line with international rates.
Sudan Prasad Dhungana, deputy director and information officer of Nepal Oil Corporation, clarified that prices were reduced based on procurement costs.
He requested media to inquire further about the influence of the US-Iran conflict and international pricing. Attempts to reach spokesperson Manoj Kumar Thakur could not be made as most petrol stations were closed amid ongoing criticism.
What Will Happen to Airfares?
Image Source, CAAN
With the rise in fuel prices, airfares had also increased correspondingly.
Criticism was raised over the high costs of flights between Kathmandu and Delhi.
With aviation fuel prices reduced by 40 NPR per liter, a corresponding decrease in fares is expected.
However, Murali Dhar Joshi, General Secretary of the Airline Operators’ Association, stated that fares have already been adjusted.
“Total fares are determined by balancing fuel costs and fare rates; this adjustment happens automatically,” he said. “After complaints about high fares, some reductions have already been made.”
Therefore, the association suggests it will not take any formal decision this time.
“Whether the current fuel price adjustments fall within the range of concessions previously granted by airlines varies by company,” Joshi explained. “Hence, the association chooses not to comment further on this matter.”
Watch this report on YouTube and subscribe to our channel here. You can also view our content on Facebook, Instagram, and Twitter. Additionally, tune in to our program on Radio Girobelu at 8:45 PM.