Sri Lanka fuel prices fall 17.9-pct, regulated bus fares down 4.2-pct
ECONOMYNEXT – Sri Lanka bus fares which were raised by state regulation three times this year have come down by 6 percent after a fuel prices were cut by 17.9 percent, while the minimum fare is up 33 percent over the year, official data shows.
Since May when fuel prices were raised by formula, bus fares were raised twice amid allegations that a part of the price increase was politically motivated.
Since montly formula pricing began, Lanka Auto Diesel has fallen from a peak of 123 rupees a litre to 101 rupees or 17.9 percent.
The National Transport Commission which regulates prices cut the price of fares by about 4.2 percent.
With the latest price cut, diesel prices are up 6.3 percent after a fuel pricing formula was started in May, from 95 rupees to 101 rupees a litre while fares are up an average of 17 percent.
But the minimum fare is up from 9 rupees to 12 rupees or 33 percent.
Earlier in the year the National Transport Commission, then under Minister Nimal Siripala de Silva raised the minimum fare to 12 rupees from 10 rupees despite Lanka Private Bus Owners Association chief Gemunu Wijeratne saying it was not required.
However following threat of a strike by All Ceylon Private Bus Owners’ Federation, the Transport ministry had raised the minimum fare.
The LPBOA had asked for a 10 percent increase but the Transport Ministry had agreed to a 12.5 percent increase, The Island newspaper reported.
Wijeratne said he did not want the minimum fare raised because it would drive more people towards three wheelers.
The NTC has kept the minimum fare at 12 rupees.
Three wheeler prices are not regulated by the state and are subject to free market competition.
There is no strong three wheeler associations to drive price collusion and taxi app firms like PickMe, which have boosted productivity of have kept prices down.
Even before taxi apps came, call centre taxis were boosting productivity.
Under state regulation, there is no competition and room for innovation is also limited, leading to a wide gap between regulated buses and the free market especially in quality.
Reports said several three wheeler association have reduced the minimum fare back to 50 rupees from 60 rupees, with 92 Octane petrol falling 19 percent to 125 rupees from a peak of 155 rupees.
In the free market, where there are no government license to stop competition, prices do not go up in line with fuel prices.
Under Nimal Siripala de Silva there were several attempts to regulate three wheelers including banning entry to younger drivers, but Finance Minister Mangala Samaraweera shot it down. (Colombo/Dec29/2018)