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Transport firms struggle with higher petrol prices
The current hostile business climate is hurting transport firms, especially in the wake of the recent hike in petrol prices.
With a fleet of 75 buses running fixed routes, the largest challenge for director Nguyen The Hung at Thai Binh Bus Joint Stock Company is how to prevent the company’s revenue from further sliding without raising fare prices.
Hung saw the diesel oil price surge VND1,000 (4.7 cents) per little (tantamount to 5 per cent) recently.
“We will strive to cut other expenses to keep fares stable though the actual costs are up 2–3 per cent,” said Hung.
Based on current oil prices, the fares for fixed routes under 150 kilometres should be lifted by VND2,000 (9.4 cents) per passenger to cover firm actual costs, according to chairman of Thang Long Transport Cooperative Bui Danh Lien.
But Liem said the rise in petrol costs was insignificant compared to the efforts the cooperative would have to make to print new tickets and the expenses associated in wading through current cumbersome procedures for price adjustment registration pursuant to Ministry of Transport regulations.
Vietnam Auto Transport Association chairman Nguyen Manh Hung agreed, saying local transport firms should not consider raising fares in the near term as the impacts of the recent upsurge in diesel oil price – the main fuel of bus fleets – remained minuscule.
There has been a sharp fall in the number of people using buses after the peak Lunar New Year period in late January 2012. According to Hanoi Bus Station Management Company, more and more buses are carrying few passengers.
For goods transport, big firms producing commodities often sign contracts with transport firms for six month or one year. Whether charges for these services will go up, or by how much, depends on negotiations between relevant parties.
“It is unlikely that goods consigners would willingly hike fares in the face of a lacklustre economy and sliding goods volumes,” said Hung of Thai Binh Bus Company.
Unlike firms transporting passengers and commodities on fixed routes taxis faces particular pressures.
Hanoi Taxi Association chairman Do Quoc Binh said taxis firms would have to think about upping fares in coming days after the price of one litre of petrol rose VND2,100 on March 7, 2012.
So far, only Mai Linh Group, which is set to hike fares by VND500–VND800 per km, is the only taxi firm to announce rises.
Under Circular 129/2010/TTLB enacted by inter-ministries of Transport and Finance, the fares for passenger and goods transport on fixed routes as well as taxis fares are set by firms themselves, conforming to state-regulated principles and price calculation methods.
“In fact, recent diesel oil and petrol price upsurges are within the tolerance levels of transport firms. However, if personal vehicle fee collection in urban cities and fee collection for the road maintenance fund take place this year, it could be a real blow on road services providers,” Binh said.
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