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Public Transportation Fares Set to Rise With Fuel Price
Tri Listiyarini | February 24, 2012

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blightyboy
2:14pm Feb 26, 2012

If fuel subsidy makes any sense at all it would be for public transport vehicles.

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The price of public transportation tickets will rise by as much as 35 percent from April following the government’s plan to increase the price of subsidized fuel, transportation operators said on Friday.

Eka Sari Lorena Soerbakti, the chairwoman of the 432-member Organization of Land Transportation Owners (Organda), said fuel accounted for about 40 percent of the total operating costs for public transportation.

“There needs to be some adjustments as the fuel price increase will boost the operational cost of public transportation,’’ Eka Sari said in Jakarta.

The government plans to increase the price of subsidized gasoline, which sells for Rp 4,500 a liter, by as much as Rp 1,500 a liter from April in a bid to reduce the impact of the subsidy on the state budget.

Eka Sari said the price of cars and spare parts had recently increased, adding to the cost pressures faced by transportation operators.

Public transportation, she said, accounts for a small chunk of the nation’s subsidized fuel costs; public transportation operators received Rp 6 trillion ($666 million) in fuel subsidy funds, around 3 percent of the state budget total.

“The planned increase will put pressure on us. It’s killing public transportation operators,” Eka Sari said.

It is unclear how the fare increase flagged by Organda reconciles with a statement last week by a Transportation Ministry official that the government was close to signing off on economy-class bus fare increases of between 15 percent and 20 percent from April.

“The fares for economy buses have been discussed and it is almost final,” Suroyo Alimoeso, the director general for land transportation at the Transportation Ministry, told bus operators in Solo on Feb. 17, adding that the ministry just needed to sign a letter to authorize the change.

The industry is facing additional concerns, and possible extra costs, over safety issues after a series of fatal bus accidents.

Last year, the ministry imposed sanctions on 10 bus companies caught breaking the law, including the revocation of an operator’s license in some cases.

The government forecast spending on fuel subsidies this year to reach Rp 124 trillion, equivalent to 10 percent of total national government revenue.

Eka Sari is a director of transportation operator Lorena Karina Group, one of the industry’s largest. Members of Organda include taxi operators Blue Bird Group as well as public transportation companies Arion Group and Primajasa Group.

Vast distances and low incomes mean many Indonesians rely on public transportation.

Investor Daily, with additional reporting by Tito Summa Siahaan