Bus fares won’t come down despite drop in fuel prices

Buses at Kencom and Ambassador bus stage. Despite a five-month back- to-back decline in fuel prices that has seen a downward trend in overall inflation, commuters should not expect a drop in fares. PHOTO | FILE |   NATION MEDIA GROUP

In Summary

• They say this is making it impossible for them to lower the cost of commuting in tandem with the drop in the price of fuel as many would expect.
• The Matatu Owners Association (MOA) says commuters should not expect lower fuel prices or a drop in inflation to affect the cost of commuting.

By VINCENT ACHUKA
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Despite a five-month back- to-back decline in fuel prices that has seen a downward trend in overall inflation, commuters should not expect a drop in fares.

Instead they should brace themselves for a slight increase as demand outstrips supply during the rush for transport in the festive season.

Already some bus companies have increased their fares to upcountry destinations. At the Machakos station, buses to Kisii, Kisumu and Kakamega are currently charging Sh900, Sh1,200 and Sh1,300 up from Sh700, Sh800 and Sh1,000 respectively. And they are expected to rise further as Christmas nears.   

While they agree that the price of fuel has dropped by a considerable margin, operators say other factors that determine the cost of running a vehicle have either remained constant or increased during the year.

They say this is making it impossible for them to lower the cost of commuting in tandem with the drop in the price of fuel as many would expect.

Under the new pricing guidelines issued last week by the Energy Regulatory Commission (ERC), diesel, which is used by most public service vehicles, is currently retailing at Sh94.52 a litre in Nairobi — Sh10 lower than in July when it was at its highest this year.

The Matatu Owners Association (MOA) says commuters should not expect lower fuel prices or a drop in inflation to affect the cost of commuting.

“The transport industry is regulated by supply and demand,” said Mr Albert Karagacha, the national co-ordinator MOA.

While the price of other products and services goes up or down according to inflation, public service operators have always moved to increase their charges in the past but rarely pass the benefits on to consumers when pump prices go down, which Mr Karagacha says is not intentional.

“We still ferry people for as low as Sh10 just like it was in 1995 when it’s not rush hour, so the increase in the price during rush hour is absolutely necessary,” he said.

The Consumers Federation of Kenya (Cofek) says it is unfair for owners of PSVs to fail to pass on the benefit of lower fuel prices to commuters.

“The cost of fuel constitutes 40 to 50 per cent of the cost of running a vehicle, so when it goes down by about 10 per cent the cost of commuting should also go down,” said Cofek’s Stephen Mutoro.