WITH 2009 shaping up to be a 'difficult year', the Government will try to moderate public transport costs next year, promised Transport Minister Raymond Lim on Sunday.

The Public Transport Council (PTC) will continue to take economic conditions into account in its annual assessment of bus and train fares, due in the second half of next year, he added.

But Mr Lim also tempered hopes that current falling oil prices will translate into a similar drop in fares, saying that there is no direct correlation between the two. If there is, public transport fares would have shot up 40 per cent between last year and earlier this year on the back of a spike in oil prices over the period, but did not, he said.

Mr Lim was speaking at a dialogue with some 300 MacPherson residents on Sunday. He was accompanied by Member of Parliament for MacPherson Matthias Yao.

In the morning, he toured the constituency, distributing food rations, chatting with residents and participating in a ceremony to lock in a time capsule containing items such as community photos.

This was followed by an hour-long dialogue where the minister fielded six questions. While a few residents touched on matters such as cycling paths and foreign workers, it was clear that concerns about the cost of living amid a recession were on the top of most minds.

Mr Gillian Teo, 54, a business development manager, started the ball rolling by expressing the hope that there will not be any public transport fare increase next year, as retrenchments mount.

In his response, Mr Lim said: 'I can understand his concern. It's going to be a difficult year next year, so we'll try our best if possible to moderate the costs.

'How do we do it?'

The PTC, which regulates public transport fares, will have to 'sit down' and weigh various factors: the impact on commuters, on transport operators and the economic conditions.

'So it will factor all this in,' he said.

The last round of fare adjustments was in September, when the PTC approved an overall net hike of 0.7 per cent in bus and train fares.

But the minister also dispelled the hope expressed in a popular question that he said many have put to him: With oil prices now plummeting, why not fares too?

'That's a fair question,' he said. 'The answer is that public transport fares are not directly linked to oil prices.'

Instead, they are tied to what Mr Lim called national factors: the level of inflation and average wage increases.

Refuting the idea that fares are directly linked to oil prices, he pointed out that 'from 2007 to this year... oil prices went up 40 per cent, but fares went up just 0.7 per cent'.

Another resident asked if commuters should be reimbursed the higher transport fares that they paid when oil prices were high, and if the transport companies were making 'a lot of profits'.

Mr Lim urged his audience to look at the 'big picture'. He said: 'We don't want the companies to be making excessive profits, but that's different from saying that they cannot make profits at all.'

Read the full story in Monday's edition of The Straits Times.