Taxis run in a street in Ha Noi. Taxi fims in the capital are likely to slahs fares after a seven-year low petrol price plunge. — Photo hanoimoi.com.vn

HA NOI (Biz Hub) — Taxi firms in the capital are likely to slash fares after domestic petrol prices plunged to a seven-year low on Thursday, but any cut would take time to implement.

Ha Noi Taxi Association Chairman, Do Quoc Binh, said the fares would be slashed by about 300 dong (a US cent) per kilometre, and it would take some 10 days for the companies to complete procedures for the cut.

He explained to Dau tu (Vietnam Investment Review) that in order to cut fares, taxi firms would have to register with the authorities, reset meters, reprint price lists and notify their customers about the change.

He calculated that these changes would cost about VND500,000 ($22.2) per vehicle, and a firm operating 200 cars would have to pay VND100 million ($4,440) for such a one time adjustment.

Ha Noi Transportation Association Chairman Bui Danh Lien said the association had set specific price levels at which transport enterprises were to adjust their charges, to facilitate the response in transport charges to petrol price fluctuations.

Companies would have to reduce charges if gasoline prices fell to around VND15,000 (67 cents) per litre, and diesel prices fell to around VND10,000 (44 cents) per litre.

On Thursday, the retail price of petrol was cut by 961 dong to VND13,752 (61 cents) per litre. The price of the E5 RON 92 biofuel also dropped by 942 dong to VND13,321 (59 cents) per litre.

The price of diesel remained unchanged at VND9,580 (43 cents) per litre.

However, Lien said continuous fluctuations in petrol prices and complicated administrative procedures still made it hard for transport charges to be adjusted in a timely manner.

The association had asked the municipal taxation department to permit transport companies to overprint their tickets with new prices, for a quicker and less costly adjustment.

It had also proposed allowing taxi firms to list the new prices on an easily seen external part of the cars, while waiting for permission from the authorities to reset their meters.

HCM City Department of Finance official, Nguyen Mau Phuong Quynh, said that this agency had already asked local automobile transport enterprises to register new rates in light of recent fuel price declines earlier this month.

She told the Voice of Vietnam that, as of Thursday, 16 out of 49 fixed-route passenger transport firms in HCM City registered rate cuts of 3-5 per cent. Three out of 14 taxi firms in the city offered rate cuts of 1.2-2.4 per cent.

Quynh said that local authorities had asked companies to register their fares again with next Tuesday being the deadline, after last Thursday's petrol price cut.

It was estimated that route transport companies whose vehicles use diesel would have to reduce rates by 4.8 per cent, and those using gasoline would have to slash rates by 4.2 per cent, she added.

In mid-January, the HCM City Taxi Association announced on its website that its members would reduce fares by 300 to 500 dong per kilometre to pass savings onto their customers.

This came as fuel prices tended to decline, bucking the trend of rising wages, social insurance spending, as well as parking and car maintenance costs in 2016, it said.

Thursday's cut was the fourth consecutive reduction in domestic petrol prices this year, and the ninth since October 19, 2015.

The last price revision was on February 3, when the price of petrol fell by 729 dong and that of E5 RON 92 was reduced by 496 dong per litre. — VNS