Transport companies do not want to reduce their fares amid falling fuel prices

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VIETNAM, August 1 – Compiled by Việt Dũng

HÀ NỘI — Although fuel prices have fallen about 20% since June, many transport companies are still stuck, unwilling to cut fares amid falling costs.

Nguyễn Ngọc Anh, owner of a transport company operating on the Hà Nội-Quảng Ninh-Lào Cai route, said his company’s fares have remained unchanged since March.

He said the tariffs were set at the level to cover fuel prices of VNĐ 26,000 per litre. Current fuel prices are comparable to the figure, excluding the need for tariff reductions.

He also claimed that his company had not received any requests for fare reductions from its passengers. It will wait for fuel prices to fall further before acting.

Nguyễn Công Hùng, president of the Hà Nội Taxi Association, said it takes time and money for a transport company to get its fare reductions approved by the authorities.

Depending on the procedure, a tariff proposal needs five to seven days to get a green light. After that, the company has its tariff meters examined by the Registrar for a fee of 100,000 VNĐ each.

Such a long and costly process has put off many companies, making them reluctant to frequently adjust their rates.

“Companies need to think twice about rate cuts because rate adjustments are cumbersome and bureaucratic,” he said.

Đỗ Văn Bằng, director of Minh Thành Phát Ltd., claimed that transport companies ran at a loss when fuel prices rose from 15,000 VNĐ to more than 30,000 VNĐ per litre.

Recent declines in fuel prices have not been large enough to help companies turn a profit. As a result, tariff reductions are out of the question.

“Transport companies would only reduce fares when fuel prices come down further,” he said.

The director also pointed out that the reduction in tariffs is not left to the discretion of the companies but requires the approval of the authorities to become official.

Because there is a lag between proposal and approval, companies have been cautious about rate reductions, fearing fuel prices will rise once their proposal is approved.

Khúc Hữu Thanh Hải, a representative of Đất Cảng Taxi, shared this view, saying that it is difficult to adjust fares according to fuel prices, as the former is bureaucratic while the latter is volatile.

“We set our tariffs at VNĐ 14,000 per km. I think the tariffs would decrease if the downward trend in fuel prices becomes more certain,” he said.

A representative of the Hà Nội Transport Association noted that most members of the association had increased fares since fuel prices had reached 22,000 VNĐ per litre.

When fuel prices soared to over VNĐ32,000 per litre, companies felt the pinch but did not raise tariffs again to cover the higher costs.

This means fuel prices dropping to around 26,000 VNĐ per liter is good news, but not enough to offset previous increases. Fare reductions are implausible unless prices stay lower.

“Fuel prices have recently dropped to around 26,000 VNĐ per liter. The figures are above 22,000 VNĐ, indicating that transport companies are better off financially, but not so profitable than thinking about fare reductions” , did he declare.

Nguyễn Anh Quân, chairman of Taxi G7, revealed that his company has set its fares below market fares to enjoy low fare benefits since its inception in 2018.

Fares have remained stable regardless of fuel price fluctuations for nearly four years, and are likely to remain so in the future.

Nguyễn Tất Thành, manager of the Giáp Bát bus station, noted that transport companies at the station made about 500 trips a day between January and June, and that none had increased fares during the period. .

He said fuel prices had fallen for a week, but none had cut fares.

Lê Đình Dũng, CEO of Hà Sơn-Hải Vân Ltd, called for more fuel tax cuts to further reduce fuel prices, which paves the way for tariff reductions.

Some companies have decided to go against prevailing sentiments by making fare reductions to help their passengers. One of the highlights is Xuân An Travel Vehicles.

The company said it had reduced fares for all vehicles based on fuel prices. For example, he charged VNĐ 900,000 for a 100 km trip on 45-seater vehicles when the fuel price was VNĐ 30,000 per litre.

As fuel prices have recently dropped to around 26,000 VNĐ per litre, the charge has been adjusted to 840,000 VNĐ.

Many owners of five-seater vehicles have gotten to work, cutting costs between 50,000 and 100,000 VNĐ per trip at the request of their passengers.

“We are following suit with an average fare reduction of between VNĐ50,000 and VNĐ100,000 per trip,” said one vehicle owner.

Thu Phương, a taxi driver from Hà Nội, said taxi fares were down slightly from last year.

Indeed, several taxi companies charge 20,000 VNĐ for the first 1.3 km and 15,000 VNĐ for the next. Meanwhile, the charge was 20,000 VNĐ for the first 1.48 km last year.

Economic experts said it took at least 10 to 20 days for recent fuel price declines to start taking hold. The prices of goods and services are unlikely to fall immediately after the dips.

During the last price adjustment period, E5 RON 92 petrol was reduced to VNĐ 25,070 per liter and E5 RON 95 petrol to VNĐ 26,070 per litre. —VNS

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