QUESTION TIME Oil prices have fallen by about a half but bus and taxi fares are going up by a fifth. And its got nothing to do with the goods and services tax (GST) either.

We all know that the oil price has fallen precipitously from over US$100 to about US$50-60 now. That’s about a halving of oil prices. Petrol and diesel prices have fallen, too - mostly, but there was inexplicable rise from March 1 though.

Let’s just take RON95 as an indicator, diesel pretty much tracks it, too, and is now the same price. On Jan 1 this year, RON95 fell 35 sen to 191 sen and a further 21 sen on Feb 1 to 170 sen a litre, a total fall of more than a quarter.

And then, inexplicably, the price went up 25 sen to 195 sen per litre when crude prices had only recovered less than a fifth of their fall and were still 40 percent lower than their price late last year.

But even so, when compared to prices as at Dec 1, the price of RON95 was still 16 sen or 7.5 percent lower. So why should taxi and express fares rise come May 15? Surely that’s a joke? But then our government departments are more known for their gaffes than their jokes. Humour is scant but incompetence is, let’s say, not uncommon.

Let’s take taxi fares first. According to the Land Public Transport Commission (Spad), although flag-down rates for budget taxis nationwide remains unchanged at RM3, the fare has been revised to 25 sen every 200m, up from 10 sen every 115m.

How smart, or rather cunning, that is. Change the base so that it becomes a bit more difficult to calculate the increase! But let’s calculate the new rates to 100m, base. Then it comes up to 12.5 sen now and 8.7 sen before for every 100m. That’s a massive 44 percent increase. Oh, but the flag-down rate remains unchanged.

So let’s calculate the rate for a 5km trip. Usage rate under new charges will be RM6.25, plus flag-down will be RM9.25. Under the old rate it is RM7.35 (4.35+3). That’s an increase of... a whopping 26 percent still. The longer your journey the closer it approaches a 44 percent increase.

Express buses will see current fares increase a hefty 23 percent from 9.3 sen per km to 11.4 sen per km.

Now, we all know that the main operating expense for all transport vehicles is fuel. When the oil price is down, what justification is there to increase rates by so much? Have maintenance costs gone up by a quarter? Surely not. Even if they have, there is still no justification for that kind of fare increase because maintenance is only a part of the total costs.

Other factors at play here?

Perhaps there are other factors at play here. Spad, more than anyone else, should know that taxi licences are given out as patronage. Taxi drivers have to recover this rental charge they pay for the licence, around RM55 a day taxi drivers tell me, before they can put money in their pockets.

Remove this and give the licence directly to taxi drivers and you can probably lower taxi fares by 25 percent. And if you allow more taxis on the streets and police them properly, competition will drive prices even further down. Ditto for express buses.

And the government can play its part by passing on all falls in oil prices truly and without any room for doubt to the final prices of fuel at the pump and elsewhere. How do you explain the RON95 price falling a mere 7.5 percent at the the pumps from December when crude oil prices have fallen 40 percent?

Does not make sense, right? Take away the subsidies by all means but when the price moves in our favour give the savings to us. Otherwise it’s cheating!

P GUNASEGARAM is founding editor of business news portal KiniBiz .