LookAtVietnam – Despite recent petrol-price hikes, transport companies have been forced to keep ticket prices unchanged to remain competitive.

Higher petrol prices have eroded the profits of transit companies.

It currently cost VND50,000 ($2.7) to travel between Ha Noi and Thai Binh – one of the busiest routes in the country, Thanh said.

Meanwhile, a few taxi firms in Ha Noi and HCM City had raised charges by VND500 per km, a representative of the Viet Nam Automobile Transportation Association (VATA) said.

On September 3, Vinasun Taxi raised fares from VND10,000 per km to VND10,500 per km, while Airport Taxi, which is owned by the Sai Gon Airport Joint Stock Company, increased charges to VND11,000 per kilometre.

VATA chairman Nguyen Manh Hung said fuel-price hikes had eaten into firms’ profits.

“Because they haven’t raised charges, these firms are struggling to earn a profit after the A92 petrol price rose to VND15,700 per litre and diesel rose to VND13,100 per litre,” he said.

Hung said the cost of fuel accounted for about 50 per cent of a transport firm’s overheads. To keep profit levels the same, he said taxi firms should have increased fares by 15 per cent and transport operators by 10 per cent since the beginning of the year.

“Because it is the rainy season, demand is low, that is why transport firms have been reluctant to raise fares. Even on the popular north-south routes, we have had to incur losses to attract more customers,” said Vu Tien Trung, assistant to the general director of Hoang Long Transportation Co Ltd.

“As of September 15, fares on the Ha Noi-HCM City route will be reduced by 20 per cent, while the number of buses plying the route will be increased to attract more travellers, especially those of medium and low incomes,” said Trung.

According to the Ministry of Transport, the number of bus travellers in August increased by just 1.02 per cent against July, while the volume of goods transported rose by 2 per cent. Buses are on average 80 per cent full. Haulage firms are also not working at full capacity.

“Because of the economic recession, the volume of goods transported is down, thus haulage companies are facing a hard time. That’s the reason why they do not dare raise costs,” Hung said.

“Because petrol prices have changed seven times over the past four months, transport companies’ business plans have failed. These firms worry that prices will continue changing. When the price is stable they will be able to raise fees,” he said.

VietNamNet/Viet Nam News