Parliament: No cuts in transport fares despite cheaper oil

The fall in oil prices is not likely to lead to a reduction in public transport fares this year, said Transport Minister Lui Tuck Yew in Parliament yesterday.

The reason is that part of a fare increase due to take effect last year was delayed until this year, explained Mr Lui.

But fares next year may come down by around 1 per cent as a result of cheaper energy.

In deciding on transport fare adjustments, the formula takes into account three factors: energy costs, core inflation and wages.

The energy component accounts for 20 per cent of the fare adjustment quantum, while core inflation and wages make up the rest.

Going by the formula, the lower energy prices should result in a fare adjustment of -0.6 per cent this year, said Mr Lui.

While this suggests that fares should come down, it does not take into account the fare increase that was proposed in the previous review but not implemented.

Last January, the Public Transport Council (PTC) recommended fares to be raised by 6.6 per cent.

But only 3.2 per cent of the increase was implemented, as raising fares by 6.6 per cent in one go would be too much, said Mr Lui.

The outstanding 3.4 per cent from last year would thus have to be factored into this year's fare adjustment.

In doing so, the fare adjustment quantum for this year would be 2.8 per cent, said Mr Lui.

He was replying to Mr Gan Thiam Poh (Pasir Ris-Punggol GRC), who had asked if the PTC would reduce fares since oil prices had fallen.

As for next year, Mr Lui said the available data so far indicates the fare adjustment quantum "could be in the region of negative 1 per cent". This means fares could come down.

Another issue raised yesterday was the Vehicle Entry Permit (VEP) fee that foreign vehicles pay when entering Singapore.

MP Ang Wei Neng (Jurong GRC) wanted to know if the $35 fee would be adjusted since Malaysia plans to impose a RM20 (S$7.50) VEP fee on foreign cars from the middle of the year.

Mr Lui said a decision will be made after the details of the fee are known.

He pointed out that Singapore's VEP fee is to bring in line the cost of owning and using a foreign-registered vehicle here, with that of a Singapore-registered vehicle.

On the other hand, Malaysia's VEP "appears to be more akin to a toll on foreign-registered vehicles for revenue purposes", Mr Lui said.

"If so, we will consider matching (it) in some form after the details of their levy are confirmed, including whether it is imposed only at Malaysia's border with Singapore or at all of its borders," he said.

adrianl@sph.com.sg