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Transport companies cut fees as fuel prices fall

Update: November, 20/2014 - 09:03
A line of taxicabs parked on the roadside of Ly Thuong Kiet Street, Ha Noi. Many taxi companies recently annouced fare cuts falling rapid declines in fuel prices this year. — VNA/VNS Photo The Duyet
HA NOI (VNS)  — Transport and taxi companies have moved to cut fees amid decreases in petrol and oil prices this year and complaints about their slow response.

The Ministry of Transport recently asked concerned organisations to implement measures to manage transport fee adjustments in line with fuel price decreases and required them to file reports with the ministry by year-end.

After 14 adjustments this year, including five petrol price increases totalling VND1,430 (6.7 US cents) and nine decreases totalling VND4,250 (20 cents), the petrol price for RON 92 fell to VND21,390 ($1) per litre now.

According to Bui Danh Lien, chairman of the Ha Noi Automobile Transport Association, about 50 taxi companies out of 114 companies in Ha Noi announced fee cuts of between VND500 (3.8 cents) and VND2,000 (9.8 cent) per kilometer since early this week.

These include Mai Linh, Thanh Nga, CP Group and Thanh Cong, as well as Van Xuan and ABC Taxis.

This was the first taxi fee cut after nine petrol price increases this year.

Lien revealed that 50 taxi more companies were expected to cut fees in the coming week.

Tran Nguyen Le Van, manager of vexere.com, the largest ticket booking website of Viet Nam with more than 1,000 transport companies, explained that with the Tet (Lunar New Year) holiday fast approaching, transport companies were afraid to lower their prices now because it would be difficult for them to ask for permission to raise prices ahead of Tet when the demand for travel was high.

In response to complaints about transport companies' slow response to petrol price cuts, Lien said companies must proposed price adjustments to the finance departments 12 to 20 days in advance, adding that immediate price changes without the required registration with concerned departments would be fined.

Some companies said they did not raise their transport fees after fuel price increases, so they won't be reducing their fees over the petrol and oil price cuts.

Several import and export companies said transport fees should be cut by between 15 per cent and 20 per cent.

However, Lien said, current fee cuts were reasonable as transport fees depended not only on fuel prices but also on other input factors such as wages, insurance fees and repair and maintenance fees.

He added that companies with more reasonable fees would attract customers.

Le Thi Lai head of the Price Management Division under the Ministry of Finance said the management of transport fee adjustments would be tightened to ensure rights of companies, the State and consumers.

Meanwhile, Nguyen Tien Thoa, general secretary of the Viet Nam Valuation Association, said it was essential to calculate how much of the total transport fees come from petrol and oil prices to serve as a basis for management decisions.

A transport ministry representative said transport companies that refused to adjust their fees following market changes to earn huge profits would risk losing customers.

According to a World Bank study, Viet Nam's total transport fees were equivalent to 11.8 per cent of the country's gross domestic product, much higher than that of the US, which was below 4.5 per cent; Singapore, which was 4.8 per cent; and Japan, which was 6 per cent. — VNS

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