Rise in fuel price, interest rates to hit public transport fares
Kathmandu, July 10
Owing to soaring fuel price, especially of diesel, and the rising bank interest rates - the two major determinant factors of public transportation fares - the Department of Transport Management (DoTM) is gearing up to raise the public transportation fares soon.
DoTM is currently evaluating the inflation in various public transportation fare determinants like fuel, bank interest rates, vehicle accessories and spare parts, workers' wage and the price of vehicles.
The initial evaluation carried out by DoTM has shown notable increase in the price of diesel and bank interest rate since the last review of public transportation fares on February 7, 2016. Similarly, the government has also raised excise duty on luxurious vehicles through the 2018-19 fiscal budget, which has made vehicles costlier.
Since the last revision in public transportation fares, price of diesel and petrol has increased by Rs 16.5 per litre and Rs 9.5 per litre to Rs 91.5 per litre and Rs 108.5 per litre, respectively. Similarly, interest rate of banks for automobile industry, which was almost nine per cent per annum during early 2016, has increased to more than 15 per cent per annum at present.
“The cost of a majority of determinant factors for reviewing public transportation fares seems to have risen in the course of time. However, we are yet to calculate the actual inflation in all determinant factors,” informed Prem Kumar Singh, acting director general at DoTM.
The government's mechanism to review public transportation fare gives 35 per cent weightage to fuel price and 65 per cent weightage to the price of other components.
As fuel price has a higher weightage when determining the public transportation fares, constant rise in price of petrol and diesel is certain to affect the commuters.
Under the existing public transportation fares in cities, including Kathmandu Valley, commuters have to pay Rs 13 for a travel of up to four kilometres, Rs 15 for five kilometres, Rs 16 for six kilometres, Rs 17 for eight kilometres, Rs 19 for 10 kilometres, Rs 21 for 13 kilometres, Rs 22 for 16 kilometres, Rs 23 for 19 kilometres and Rs 24 for distance travelled above 19 kilometres.