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‘Fuel subsidy not for us’

Business

…’cry-baby’ taxi owners still dissatisfied with fuel price subsidy, hiked public transport fares

Staff Reporter

Public transport operators, who have become a kind of cry-babies of the industry, say the fuel prices subsidy implemented by government in a move to arrest the ever-soaring rates, was not done for them hence it will not do much for them.

A fortnight ago, government announced a six-month M180 million subsidy on all petroleum products’ prices which will see prices stay at a fixed and reduced price for the next six months up to December 2022 in spite of the hikes influenced by the Russia-Ukraine war which has been raging for most of this year.

As of today, July 01, 2022 fuel prices will be adjusted downwards and remain at a fixed rate regardless of any future fuel price hikes at international markets until December.

The announcement stated prices for the fuel products are expected to be fixed at M22.20 for petrol93, while petrol95 will be M22.65, diesel at M23.05 and wholesale price for paraffin will be M17.80 with no increment until December which is an average drop of up to M1.50 per litre.

With the aforementioned, as well as the public transport price hikes implemented since last week Friday June 24, 2022 operators are still dissatisfied with the turn of events as they feel disenfranchised.

Chairman of the Lesotho Taxi Operator’s Association Mokete Jonase, told this publication in an interview last week that the increased fares were not enough while also adding that the subsidy was not done with public transport operators in mind.

Jonase maintains that looking at how the cost of living has gone up, the government subsidy is not for them as taxi operators. 

“We had proposed a much higher increase than the 30% we got which means even with the subsidy we are not out of the woods yet,” Jonase said.

“The intervention is not only for taxi operators but for all that use fuel so we are still not assisted by this move. However, we welcome the decision to halt the fuel price for six months which could help us recover in the long run.”

The historic hiked public transport fares, a second in a space of eight months, was implemented at the behest of an outcry by operators who felt the souring fuel prices phenomenon was having a negative impact on their business. In forcing government’s hand, they had even threatened industrial action if their woes were not heeded.

However, with their demands for a 30% price hike implemented and a subsidy to keep the fuel prices at a constant rate for six months, the operators still feel more could have been done for them.

Transport Minister Tsóeu Mokeretla has been seen as the most lenient of all ministers to the requisites of public transport operators, having granted them a fare hike for the second time within a space of less than a year. In November last year, public transport fares were hiked at the request of the operators who are now dissatisfied with the latest move to conciliate price hikes effects.

A levy on fuel will be reduced by up to M1.50 from July to December 2022, the Minister of Energy and Meteorology Mohapi Mohapinyane said in a statement about a fortnight ago. 

Meanwhile, echoing similar sentiments to the operators, the Ministry of Transport’s Board Chairperson Limema Phohlo told Newsday that the announcement made little to no impact at all on the public transport business.

“In all honesty, the announcement is too late and as a result, it makes no impact at all because the price of fuel has increased badly since February. We have been in a dark hole for four months,” Phohlo said.

The new public transport fares structure that came into effect on Friday have placed the minimum fares for a 10km radius usually referred to as ‘local’ ride, at M11 for a minibus taxi up from is M8, 50, while cab taxis commonly known as 4+1, now charge M12,00 up from the previous M9 effected just over eight months ago.

Despite the foregoing, where it has been more than just fuel and public transport prices that have experienced a massive hike in latter times, with basic food commodity prices exponentially soaring almost every month, little has been done to cushion the effect on the ordinary person of working class to lower.

At the presentation of national budgetary estimates earlier this year, Finance Minister Thabo Sofonea announced a 5% across-the-board salary increase for all public servants who make-up a lion’s share of the national workforce. This happened over and above the inflation which was also estimated to go up to 6%.

But Phohlo feels the latest exploits do not justify a revisit of a decision to hike public transport fares yet as he says public transport owners have borne the brunt of the ever-increasing fuel prices with no one moving to their rescue for months now.

“Taxi owners have been desperately trying to survive for the past three months or so, with that fixed price of fuel, there is no difference but only a half of the help that is required. I suggest the government does more than that. At least if a litre of fuel can be M12 then we can think about a decrease in the taxi fares,” Phohlo explained.

Prices for public transport are not only influenced by petroleum prices, he added. 

“Yes, fuel was a contributing factor to the public transport fare increment. There are other things that come into play such as car parts, servicing the car, the owner’s profits and payment of employees. As we know, food prices have gone up also which means the drivers need to feed their families.”

The advent of the Covid-19 pandemic had a chilling effect to the normal livelihoods of the public with the general economy having taken a serious knock. Job security for people working in the textile factory industry – the largest employer after government – continues to be threatened as many textile factories continue closing business and costing employment to scores of employees previously numbering almost 50 000.

With the Russia-Ukraine war, the catastrophic situation moved from bad to worse with soaring fuel prices forcing prices of livelihood to skyrocket.

(additional reporting by Chris Theko)

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