Monday, February 23, 2015

TABOA wants bus fares to be increased instead of reduced

Despite the fall of price for oil products at a global market, Tanzania Bus Owners Association (TABOA) has claimed that, the recent reduction of fuel selling prices which was announced by the government is not enough to subsidize the operational costs for transporters in the country. Instead, the transports are in demand of the fare increase as the current fare rate being charged by the government is not even enough despite reduction of fuel price at a local market. TABOA’s Chairman, Ernea Mrutu said last week in a telephone interview on Wednesday this week that, his association had been demanding for the fare increase since 2012 when the fuel price rates in the country was fetched the same as the current rate after review but the government could not respond. Mrutu noted that, transporters are not operating by using fuel alone, but there are other huge expenses which they have to incur such as vehicle maintenance service costs as well as vehicle spare parts whose costs he said are so expensive at a local level. He outlined other reasons as transportation businesses in upcountry regions is so expensive and very tough bearing the fact that, greater percentage of roads are not in good order as most of them are dilapidated and quite impassable during rainy seasons. He said transportation business in upcountry regions is mainly dominated by the private sector who feels the pinch and the public sector had surrendered due to its expensiveness. However, he further noted that, the reduction of fuel price rate is a relief for transporters and it should not be a prerequisite of fare reduction at a local level as this is temporary for the world fuel market is not predictable as it might rise indefinitely and shot up. In view of this, however, he is appealing to the government organ to think twice and if possible increase the fare or leave it at a constant rate. 

Three weeks ago the Energy and Minerals minister George Simbachawene called upon both the Tanesco and Sumatra to lower prices but to date, the latter remains reluctant. Issuing the order Minister Simbachawene said “I will be happy to see the fares of community buses reduced so as to enable common people to also benefit from the falling fuel prices”. Following the Minister’s order, TANESCO announced the cut of electricity charges by 2.6 percent effective from 1st March next month for electricity consumers in the country. But Sumatra’s Corporate Communication Manager David Mziray was quoted by this paper onm Monday this week as saying that the decline in world and local oil prices was too minimal to warrant a reduction in bus fares.  He outlined basic factors as the transport sector is different from other sectors  because it is faced by a number of issues that must be considered before reducing any prices. Also according to him, Sumatra is guided by rules and regulations that stipulate ‘only when bus operators are getting profits in excess of 25 per cent of their initial investment can they reduce fares. The government through the Energy and Water Utilities Regulatory Authority (EWURA) announced the reduction of the wholesale and retail prices of petroleum products by between 139/- and 187/- per litre.  Ewura said the retail prices per litre for petrol, diesel and kerosene have decreased by Sh. 187 (9.56 per cent) for petrol, 139/- (7.53 per cent) for diesel, and 177/-(9.64 per cent) for kerosene respectively. In December last year, prices per litre for petrol, diesel and kerosene dropped by Sh. 149/- (6.83 per cent), Sh. 119/- (5.85 per cent) and Sh. 106/- (5.31 per cent) respectively. Apart from the retail price, wholesale prices also decreased by Sh. 148.66/- (7.16 per cent) for petrol, Sh. 118.69/- (6.16 per cent) for diesel, and Sh. 105.81/- (5.59 percent) for kerosene respectively.

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