Complicating matters

Agreement on the new fares of commercial vehicles had not been reached by this writing

yesterday, two weeks after the oil price hikes. The transport owners unilaterally raised fares from 30% to 40%, whereas the fuel price had gone up from 10% to 25%. Seven student organisations, on their part, agitated for a student discount on short-haul transport of 50%, up from the earlier 33%. The owners of the oil tankers, which carry petrol for the Nepal Oil Corporation, had been on strike, too, demanding an increase in tanker charges — the demand was, however, addressed yesterday. Happily, the government had also made a deal with the students the day before, agreeing to allow them a 45% discount on local transport. But the transporters, dissatisfied with the flat government hike of 25% — the appointed panel had recommended 25%-35% upward revisions — have struck, first Bagmati zonewide, then nationwide, at times resorting to vandalism, as reflected, for instance, in the damage caused to six tourist buses in Pokhara on Tuesday.

What constitutes an appropriate fare could easily be resolved if the disputants agreed to refer the matter to an experts’ committee representing all sides, entrusting it with the task of looking into all facets of the problem thoroughly. However, it appears difficult to find justification for the demand of a hike, say, of 35% in fare when the fuel price has risen by less than 10% per cent. But, even a fare increase equal to the percentage of oil price hike would be unfair to the public because fuel alone does not constitute the total cost of the operation of a commercial vehicle. Therefore, this problem requires a scientific basis for determining fares — by how much the total average variable cost of a vehicle goes up because of an additional rise of a rupee in fuel price, and how total daily revenue changes with each additional rupee change in fare. As for the rise in the cost of vehicles and their spare parts, the matter should be separately considered, as it must not be mixed up with the extra oil price in fixing fares, because these two kinds of cost are totally different in nature.

The government, on its part, has not improved its functioning. It should have started work on fare revision, at least simultaneously with the oil price hike. Its flat rate of 25% appears unscientific, because it does not take into account the differences in price increases in several fuels. Also questionable is the government’s decision of granting a higher discount on fares to students without proper consultation with the transport operators. The strikes and agitations have cost the people considerably, and in various ways. In order to avoid such problems

in the future, there should be in place a permanent mechanism for fare fixation. But the basis should be transparent, and the public should not be given reason to feel cheated by those who can get their way through forcible means, just because no powerful consumer movement exists in the country. Fare-fixing is by and large a technical matter.

The present mess has resulted because neither the government nor the transporters listened to the voice of reason on time. It is a case of a simple matter made complex.