Directive against fare increments unfair to transport operators: YAFO Institute tells Transport Ministry

Policy think tank YAFO Institute has urged the Ministry of Transport to adopt an all-rounded approach to addressing challenges within the transport sector.

Contributing to the public discussions on the recent fuel price hikes and demand by commercial transport operators for increased fares, the Institute expressed its disagreement with a directive by the Transport Ministry prohibiting the operators from increasing fares.

In a press statement on Monday, the Institute asked the Ministry to address the root cause of fare increases, which, according to it, is primarily driven by fuel price surges, and not simply halt any proposed fare increase from drivers.

The Ministry of Transport must recognize the root cause of the fare increases. The primary factor driving up transportation costs is the surge in fuel prices. The recent spike in oil prices has directly impacted operational costs for transport providers, necessitating adjustments to fare rates to maintain viability.”

“Any attempt by the Ministry of Transport to curb fare increases without addressing the underlying issue of fuel prices is akin to treating symptoms without addressing the illness. The Ministry of Transport must understand that when the cost of operating a business goes up, producers transfer the cost to consumers. Price control is unworkable, and any attempt to impose it through the use of security forces would lead to grave problems for which the Ministry of Transport is  unprepared,” YAFO Institute noted.

The Institute argued that preventing fare adjustments without considering economic realities could negatively impact the transport industry, leading to unrest, disrupted services, and livelihoods.

YAFO proposed measures to stabilise fuel prices while supporting transport operators, including “exploring avenues for tax cuts or tax relief to cushion the impact of rising fuel costs.”

Stakeholder consultation between government agencies, transport unions, and other relevant parties is crucial for ensuring reasonable and long-lasting decisions in the transport industry, according to the Institute.