Ministry urges transport firms to slash their rates

Hanoi  (VNA) – Companies providing transport services with automobiles must further slash fares following the recent drop in petrol prices this month, Deputy Minister of Transport Nguyen Hong Truong urged.

"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 Hanoi on February 22.

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 percent to 35 percent of all transportation costs for businesses whose vehicles use gasoline, and 35 percent to 45 percent for those consuming diesel.

Since the beginning of this year, the price of RON 92 gasoline has dropped four times by a cumulative 2,650 VND per litre, reaching a seven-year low of 13,750 VND (61 US cents) per litre after the latest cut on February 18.

The price of diesel has also been lowered three times by a cumulative 2,400 VND per litre, now staying at 9,580 VND (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 on February 22 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.

Hanoi 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 Vietnam 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 percent to 3 percent when fuel prices fluctuate by 10 percent to 12 percent.

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.-VNA