Road to higher transport costs

February 28, 2011 | 15:14
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Transport cost fares may jump 10-15 per cent amid rising input costs and recent local currency devaluation.

“We are calculating expenses for an upward revision of fares in the coming period,” said Hoang Ha Joint Stock Company general director Luu Huy Ha.

Hoang Ha currently operates 72 bus trips per day on Thai Binh city-Hanoi route which is one of the highest traffic density roads in the north.

According to Vietnam Auto Transport Association chairman Nguyen Manh Hung, fuel expenses currently accounted for around 50 per cent of transport costs.

After the State Bank decision to devalue the Vietnam dong by 9.3 per cent against the greenback in mid February, indirect costs of transport firms hiked by around 10 per cent amid escalating vehicle and key material price jumps.

“Transport costs must put on at least 10-15 per cent in the coming period to ensure transport firms recoup their expenses, let alone making profits,” Hung said.

According to head of Ministry of Transport’s Transport Department Tran Ngoc Thanh, there were two reasons for the late revision of transport prices.

First, under Circular 129/2010/TTLT-BTC-BGTVT guiding transport cost on roadway transport businesses were ineligible to raise fares immediately. Accordingly, they must fill in declarations and register new fare levels to local financial departments and send reports to local transport and tax departments. The registration must be made at least three days before the new price levels are applied.

Second, there was a sharp fall in the number of passengers these days on the back of Lunar New Year holiday peak season. Transport firms, fear of losing passengers, then could not immediately raise the fares.

Industry experts assume that the only way out for transport firms currently was to rationalise investments to become more professional.

“For fixed route passenger transport, businesses should invest in ameliorating their brand value. For taxis, businesses must think carefully of locating their taxis on appropriate areas to best serve customers,” Hung said.

On February 24, 2011, the domestic petroleum retail price jumped by between VND2,110 and VND3,550 per litre to VND19,300 for petrol, VND18,300 for diesel oil, VND18,200 for kerosene and VND14,800 for fuel oil.

By Anh Minh

vir.com.vn

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