Intercity Road Passenger Transportation Fares to Rise 30%

EghtesadOnline: A30% increase in intercity road passenger transportation fares will come into effect as of June 22, according to an official with the Road Maintenance and Transportation Organization affiliated with the Ministry of Roads and Urban Development.

News ID: ۷۸۶۴۹۴

26 May 2021

“The Central Bank of Iran has put transportation sector’s inflation at 87%, but as passengers of public transportation, which often constitute the less privileged, cannot afford such a big hike, a 30% increase in fares has been decided,” Darioush Baqer-Javan was also quoted as saying by Mehr News Agency.

“The rise in passenger transportation fares can only make up for part of the sector’s increased expenses. Transporters have been hit hard by Covid-19 pandemic restrictions,” he added.

Seventy percent of bailouts requested by transportation companies (road, air, rail and sea) hurt by the outbreak of coronavirus have been paid as of April 20.

According to Mohsen Sadeqi, an official with the Ministry of Roads and Urban Development, out of 48,000 billion rials ($208 million) worth of loans requested by transportation sector, 32,700 billion rials ($142 million), i.e., 70% of the total requested loans, have been paid.

“Loans envisioned by the government for transportation sector are divided into two parts: the first part of this support package have been paid to air and rail transportation sectors, which have been seriously hurt by the pandemic and the second package has been dedicated to over-the-road public transportation sector,” he was quoted as saying by Fars News Agency.

The official noted that 203,000 applications have been approved for government-backed loans by transportation companies, of which 155,000 or 76% have reached the payment stage; the documents and collaterals of the rest are under review.

Urban Household Expenses Triple Over 7 Years

Transportation expenses for urban households tripled over seven years from 12 million rials ($52) in the Iranian year ending March 2013 to 37 million rials ($160) in the year ending March 2019, the Ministry of Cooperatives, Labor and Social Welfare reported.

However, in the year ending March 2020, transportation expenses declined by 0.8% compared with the previous year to reach 36.7 million rials ($160).

The average transportation expenses for rural households increased from 8 million rials ($34) in the year ending March 2012 to 25 million rials ($100) in the year ending March 2020, suggesting a threefold rise over the period.

The share of transportation in the overall household expenses in urban areas was on the rise from the year ending March 2014 to March 2018, but declined from the year ending March 2018 to March 2020. The sharpest decline was registered in the year ending March 2020 with 1.7% year-on-year.

The share of transportation costs from the overall household expenses in rural areas has been on an uptrend over the years under review. However, fluctuations have been common, such that it reduced by 0.6% in the year ending March 2020 compared with the preceding year.

In urban areas, the share of transportation in the overall household expenses has risen from the first income decile (those with the lowest income) to the 10th income decile (those with the highest income).

The biggest share of transportation expenses was registered for seventh and ninth deciles with 8.9% and the smallest shares were registered for first decile with 5.5% and 10th decile with 6.2% in the year ending March 2020. The sharpest year-on-year decline in the share of transportation expenses in the year ending March 2020 was posted by 10th decile with 3.7%.

The same trend (the rise in transportation share in accordance with income decile) is true for rural areas. In the year ending March 2020, the biggest transportation share in the overall expenses of a rural household was registered for 10th decile with 11.1% and for ninth decile with 10.1% while the smallest share was posted by first decile with 4%.

The share decreased for all income deciles, except for fourth and 10th deciles in the year ending March 2020 compared with the previous year.