Nepal | May 20, 2019

Transportation fares to be revised soon

Pushpa Raj Acharya

Kathmandu, September 4

Along with the reduction in fuel prices, the government is preparing to adjust the fare of public transportation accordingly. After the direction of the Central Monitoring Committee led by the chief secretary on Thursday, the Department of Transport Management (DoTM) has expedited preparations to reduce the fare of public transportation.

Talking to The Himalayan Times, Chandra Man Shrestha, director general of DoTM, said fare of public vehicles that run on petrol will be reduced very soon. “Fuel prices have just 35 per cent weightage in the Scientific Fare Adjustment System and we only adjust transportation fare when fuel prices go up or down by five rupees.”

The last time that DoTM had made an adjustment in transportation fare was on February 9 when Nepal Oil Corporation (NOC) — the state-owned petroleum supply monopoly — had reduced the price of petrol by five rupees a litre and diesel by Rs 4.50 a litre.
Shrestha informed that if NOC reduces the price of diesel by a further 50 paisa, then it would be possible to reduce the transportation fare of public vehicles that operate on diesel as well. In this context, the Office of the Prime Minister and Council of Ministers (OPMCM), today, directed the Ministry of Commerce and Supplies, the parent ministry of NOC, to reduce the price of diesel to an extent that the fare of public vehicles that run on diesel could also be reduced to some extent.

As per Shanta Raj Subedi, secretary of the OPMCM, the government has decided to take this initiative keeping in mind the increased movement of people during the festive season which is nearing. He further added that NOC will soon adjust the price of diesel so that DoTM can adjust the fare of public vehicles that run on diesel.

Currently, NOC has been generating a profit of Rs 11.75 and Rs 11.22 on the sale of each litre of petrol and diesel, respectively. NOC Managing Director Gopal Bahadur Khadka said that NOC can adjust the price of diesel within this fortnight to pave the way for public transportation fare adjustments.

“If the NOC board directs the management, we can adjust the diesel price immediately,” said Khadka. Normally, NOC makes adjustments to the price of petrol, diesel, and kerosene every fortnight or at least once a month based on the international market rates as per the automatic pricing mechanism.

DoTM fixes transportation fares based on 14 different indicators that include salary of driver/conductor/helper/management/booking staff, cost of insurance, garage space, depreciation, vehicle taxes, maintenance, overhead cost, loan interest, lubricant/tyre costs, fuel prices and profit of the operator, among others.


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