Ministry urges transport firms to slash their rates this month

Transport businesses said they had been hesitating to change rates because it was time-consuming and costly for them in implementing any adjustment. - Photo dantri.com.vn

"Transporters, including taxi firms nationwide must be aware that it is their responsibility to reduce charges when fuel prices fall. It is also the corporate culture," he told a meeting in Ha Noi yesterday.

Truong said the number of companies cutting fares and their reduction levels were yet to match the fuel price developments.

Industry insiders calculate that fuel expenses account for 25 per cent to 35 per cent of all transportation costs for businesses whose vehicles use gasoline, and 35 per cent to 45 per cent for those consuming diesel.

Since the beginning of this year, the price of RON 92 gasoline has dropped four times by a cumulative VND2,650 per litre, reaching a seven-year low of VND13,750 (61 US cents) per litre after the latest cut last Thursday.

The price of diesel has also been lowered three times by a cumulative VND2,400 per litre, now staying at VND9,580 (43 cents) per litre.

However, less than one fourth of 4,000 fixed-route transporters and about one-third of 1,000 taxi firms in the country have cut their rates so far this year, according to Truong.

HCM City Taxi Association Chairman Ta Long Hy said yesterday that taxi firms in the southern city had cut fares by at least 300 dong per kilometre, in line with what the association announced on its website in mid-January.

Ha Noi Taxi Association Chairman Do Quoc Binh also told the press late last week that taxi firms in the capital were likely to slash fares by a similar amount per kilometre within 10 days.

Truong asked the Viet Nam Automobile Transport Association (VATA) and the local associations to actively co-ordinate their members to further cut rates in a transparent manner to the public.

Transport businesses said they had been hesitating to change rates because it was time-consuming and costly for them in implementing any adjustment.

VATA Chairman Nguyen Van Thanh said procedures in registering the adjustment remain complex with the administrative agencies, while Hy said such a one-time adjustment currently cost enterprises billions of dong.

Thanh suggested that the authorities should let taxi firms reset their meters themselves and take legal responsibility for this, instead of requiring them to wait for approval from directorates for standards, metrology and quality.

Hy proposed the authorities setting a price range to help enterprises be more active in price adjustments. Transporters calculated that they can adjust fares up or down 2.8 per cent to 3 per cent when fuel prices fluctuate by 10 per cent to 12 per cent.

Nguyen Thi Thuy Nga, deputy director of the Ministry of Finance's Price Administration Department, said transport charges followed market moves but as they directly affect people's lives, the government still has controlling measures to harmonise the benefits between firms and citizens.

"I must admit that the management of transport charges still shows many shortcomings," she said.