Fuel price surge forces govt to revise public transport fares after four-year gap

KATHMANDU: The government has initiated the long-delayed adjustment of public transport fares following a significant rise in fuel prices, marking the first such revision in nearly four years. The move comes amid mounting pressure from transport operators and escalating operational costs driven by global oil market volatility.

The Department of Transport Management has completed internal consultations and is preparing to recommend revised fare rates to the Ministry of Physical Infrastructure and Transport for approval. Officials confirmed that the proposed adjustment has been finalized through the Scientific Fare ditermination framework, incorporating multiple cost variables.

Transport operators had intensified demands for fare revision after recent hikes in petroleum prices. The department has already conducted a series of stakeholder consultations and technical meetings, aligning the adjustment with the scientific fair system that factors in fuel prices, inflation, labor costs, and maintenance expenses.

According to officials, the fare ditermination committee has concluded its analysis and finalized recommendations. The report is expected to be forwarded to the ministry for approval, after which the new fare structure will be implemented nationwide.

An expert committee formed earlier to review fare structures has already submitted its report to the department’s Director General. The report integrates rising costs of lubricants, tires, spare parts, and fuel, proposing adjustments based on a scientific methodology.

The government had last formed a committee in Shrawan 2082 BS (mid-July 2025) to reassess public transport fares. The panel studied market prices of vehicle components alongside recent petroleum price hikes to determine a revised fare baseline.

The latest adjustment push follows a sharp increase in fuel prices triggered by geopolitical tensions in West Asia. Disruptions in global oil supply—linked to the ongoing conflict involving the United States, Israel, and Iran—have pushed crude oil prices upward.

Reflecting these global trends, Nepal Oil Corporation raised fuel prices effective from Chaitra 1, 2082 BS (mid-March 2026), increasing petrol by Rs 15 per liter and diesel and kerosene by Rs 10 per liter.

Transport entrepreneurs argue that fare adjustments have not been fully implemented since 2078 BS (2021), despite repeated cost escalations. The Federation of Nepal Transport Entrepreneurs has called for immediate revision within the current fiscal timeline, citing unsustainable operating conditions due to fuel dependency.

Under the Scientific Fare Policy introduced in 2065 BS (2008), 65 percent of fare adjustment is based on vehicle-related costs—such as purchase price, taxes, tires, and spare parts—while the remaining 35 percent is linked to fuel prices.

The system allows for three types of fare revisions: long-term adjustments every 10 years based on 13 indicators, biennial reviews every two years, and automatic revisions triggered by fluctuations in petroleum prices.

Officials estimate that the upcoming adjustment could increase fares by 3 to 5 percent or more, depending on route categories. The revised rates will apply to short-, medium-, and long-distance passenger transport, as well as freight services, once approved by the ministry.

The decision is expected to have broad economic implications, potentially affecting inflation, logistics costs, and consumer prices across Nepal’s supply chain.