Transport industry are adjusting their fares higher following the increased petrol price.

 Transport industry concerns over new fuel prices

Freight transport companies have been hardest hit by the price rises. The industry has been left with no choice other than to implement a fuel surcharge to make ends meet. However they also face the pressure from clients bargaining over prices.

Dang Duc Tiep, Director of Dang Tien Transport Company said he would have to increase the fees for new contracts and negotiate new fees for existing long term contracts.

Fuel fees account for 40-50% of transport costs. With petrol prices increasing by 5-10% transport fares have had to add knock-on costs of 2-5%.

Taxi companies have also been affected by higher fuel costs. Ta Long Hy, President of the Ho Chi Minh Taxi Association said that they had an agreement to increase taxi fee by VND1,500 (USD0.07) due to loan interest repayments and foreign exchange changes in a meeting a week ago. Now with an additional petrol price hike, they will have to raise prices again. Hy said petrol prices accounted for about 30% of current taxi prices, so fares were likely to increase by at least 3%.

However firms would have to continue bearing the cost as they navigate the convoluted process to increase fares. Currently firms have to organise another meeting, apply for registrations, and amend taxi charge meters. This would take from 10 to 15 days.

Motorbike taxis charge an average VND4,000-7,000 (USD0.19-0.33) per kilometres, but prices have risen from March 8 to VND6,000-9,000 (USD0.28-0.43) per kilometre.

Huan, a motorbike taxi driver said, “it’s not just petrol prices that have risen, but the prices of cooking gas and food have also climbed to new heights. These fees aren’t going to make us rich, they’ll just give us enough to earn a living.”

Transport companies bearing the brunt of increased petrol price

Taxi companies to increase charges