Bus fares hike:Experts suggest solutions

DAR ES SALAAM: TRANSPORT stakeholders are pushing for alternative fuel-powered vehicles to cater to the increasing bus fares, which have been greatly contributed to by the rise in global fuel prices.

They said alternative fuels such as gas and electricity will reduce dependence on oil imports, which are prone to price fluctuations due to ongoing global geopolitics such as the Middle East Crisis and the Russia-Ukraine War, which have undermined oil production.

The stakeholders shared their views yesterday with the “Daily News” in reaction to the new fares, which require travellers for commuter and intercity buses to dig deeper into their pockets after the Land Transport Regulatory Authority (LATRA) announced that the fares will be effective from December 8 this year.

An economist, Dr Isaac Safari, said the increase in bus fares was expected due to the disruption of the global fuel supply chain caused by geopolitical tension from the Russia-Ukraine war and the Israel-Hamas conflict, as well as the post-Covid-19 impacts that have shocked the world economy, including oil-producing countries.

LATRA attributed the increase in fares to, among other things, the global increase in petroleum products, high operation costs, and ongoing dwindling returns on operators’ investments.

Dr Safari said that in the short term, the ripple effects of the increase in fuel prices were unavoidable, but in the long term, Tanzania can opt for alternative energy by enhancing e-vehicles and gas vehicles to fill the vacuum caused by oil importation, which tops production costs.

“Every day our country experiences an increase in oil demand with disrupted global fuel supply chains. Investing in alternative energy, including gas, will significantly meet the demand for the country’s energy stability,” Dr Safari said.

He said vehicles powered by alternative sources of energy, including gas and electricity, which will be locally produced, are affordable for bus owners and will allow citizens to enjoy cheaper transport services.

Dr Safari, who also works as a lecturer at the St Augustine University of Tanzania (SAUT), cited other developing countries such as India as an example of a country that has been mitigating reliance on oil by shifting to alternative energy sources, including organic energy from sugarcane remains.

To provide relief to citizens from the increased bus fares, Dr Safari advised the government to reduce taxation in the entire oil supply chain, warning that such a hike in fares, if left without fiscal intervention, can result in inflation and economic recession.

“An increase in fares doesn’t mean an improvement in per capita income,” he said.

Furthermore, he called upon bus owners to utilise emerging technologies, including automation and the Internet of Things (IoT), which may be useful in saving money spent on hiring many agents and middlemen.

Dr Safari also urged bus owners to capitalise on good management and efficiency in service delivery to boost their return on investment.

Geologist and politician Professor Sospeter Muhongo echoed the need for detailed exploration and investment in petroleum and gas as a long-term measure for the country to have a stable fuel supply.

Prof Muhongo, who is also the Musoma Rural Member of Parliament (MP), said exploration of petroleum deposits will enable the country to scale up investment in refining fuel resources to create fuel self-sufficiency.

He noted that to date, major oil-producing countries, including the Organisation of Oil Producing Countries (OPEC+) and Russia, have been cutting oil production to increase demand from oil-importing countries, leading to an upward trend in oil prices.

Prof Muhongo said, for instance, Russia will extend its production cut of 50,000 barrels per day until the end of this year, indicating that global oil prices will continue to increase until the end of this year and may even rise until 2024.

The Tanzania Bus Owners Association’s (TABOA) Secretary-General, Mr Priscus Joseph, supported the move to alternative energy, as it will reduce bus companies’ operating costs arising from high oil prices, enabling them to provide affordable transport services to all citizens.

Mr Joseph doubted that regardless of the proposed new fares, the operating costs for buses can still be high due to the dependency on imported oil, accompanied by worldwide inflation and a scarcity of dollars for economic mobility.

According to LATRA, the commuter bus fare increase has considered the distance of the bus routes. For instance, for routes within 10 kilometres that previously cost 500/-, there is an increase of 20 per cent (100/-), resulting in a new fare of 600/-, according to LATRA.

Meanwhile, a commuter bus routing to 36 or 40 kilometres, which previously charged 1,100/-, has an increase of 27 per cent (300/-), resulting in a new fare of 1,400/-.

Unlike the intercity buses, which have seen changes in price increases based on factors such as road level (tarmac or gravel) and status, for example, ordinal buses routing through gravel has a fare increase of three per cent, while those via tarmac road have an increase of 17 per cent, according to LATRA.

Furthermore, for luxury buses routing through tarmac, the fare has increased by 19 per cent. However, the bus fares for school students in town will remain 200/-.

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