By Denise A. Valdez, July 29 2019; Business World
Image Credit to Business World
THE public land transport regulator has set a formula for changes in jeepney, bus, taxi and UV Express fares that takes into account fuel pump price movements, in order to remove the need for operators to seek regulatory approval for each adjustment.
The Land Transportation Franchising and Regulatory Board (LTFRB) published Memorandum Circular No. 2019-035 in a newspaper on Sunday which outlined the formula for base fare adjustments using inputs such as fuel pump price data from the Energy department and the share of fuel expenses in a transport operator’s costs, as verified by the LTFRB.
For example, a regular jeepney ride now costs P9 for the first 4 kilometers plus P1.40 per succeeding kilometer. The LTFRB estimates that fuel accounts for 35% of a jeepney operator’s total cost. If the pump price of fuel were to rise to P55 per liter from P50 per liter, the adjusted fare would be P9.315 plus P1.449 per succeeding kilometer under the formula, according to the memorandum circular.
“This is the fare matrix formula the (LTFRB) Board will adopt whenever there are fuel price adjustments, principally,” LTFRB Chairman Martin B. Delgra said in a mobile phone message when asked for an explanation on Sunday.
“The principle behind [the circular] being that when the fuel adjustment — downward or upward — reaches a threshold, a change in fare will take place.”
Asked if the formula will do away with the need for public utility vehicle operators to apply for fare adjustments, Mr. Delgra replied: “That is the essence.”
The memorandum circular states that the LTFRB will establish a fare matrix that public transport operators will use as guide for automatic fare adjustments.
This removes the need for public hearings that frequently result in delayed implementation of fare adjustments when price conditions have already changed.
Transportation Secretary Arthur P. Tugade had said last year that he wanted a predetermined matrix for public utility vehicle fares to enable automatic adjustments that promptly address fuel price changes. — Denise A. Valdez