Fuel price fall fails to push transportation prices down
Following a decision by the Kurdistan Regional Government on 25 August, 2013, the price of gas (petrol) was unified in all public and private fuel stations in the Kurdistan Region at a rate almost half the then market rates.
The decision also entailed the ban of trading in any type of gas (petrol) except Beiji.
However, two months on from the enforcement of the regulation, there is now a concern among locals about the fact that this decision has not impacted on public transportation fees.
Although the expectation was that fuel price was among the key factors determining transportation prices, taxi drivers argue that they cannot reduce their fares simply because fuel prices have gone down, as there are many other criteria.
“It is true that fuel prices have fallen, but taxi fares do not only reflect those prices,” said Yousif Sleman, a taxi driver in Erbil. “Consumer goods are expensive and prices are continuously rising. Moreover, the taxi business is constantly weakening.”
According to Sleman, the majority of people now have their own private cars and no longer use taxis a lot.
“Moreover, the majority of Ministry of the Interior employees who enjoy a decent permanent salary have private taxis, which takes away part of our business.”
Sleman also added that although the Ministry has passed a regulation preventing its employees from working as taxi drivers, “this regulation has not yet taken effect.”
Handren Sherko, another taxi driver, who has been in this business for 14 years now, admits that fares should have gone down with the decrease in fuel prices. That they didn’t is partly because of the taxi drivers, who kept the prices high, and partly the fault of the government for not enforcing standardized fares.
“It is true that government has reduced fuel prices, but it also allows huge numbers of vehicles and taxis to be imported into this region, which makes it more difficult for taxi drivers to live off their taxis alone,” said Sherko.
Citizens, on the other side, complain about the high price of transportation.
Mamosta Najat, a school teacher, says he goes to work and back home by taxi every day.
“I pay 4,000 to 5,000 Iraqi Dinars on taxis every day, which amounts to almost a quarter of my monthly income,” Najat complained. “I have not noticed any reduction in taxi fares in the two months since the fuel prices were regulated.”
Najat argues the government should not allow taxi drivers to play with the prices as they wish.
There are many people who believe the government, rather than drivers, should set taxi fares.
Experts suggest controlling the number of taxis operating in a city, as well as identifying their locations and using taxi meters to calculate fares based on specific criteria as ways of controlling transportation costs.
The importing of taxis should also be regulated; companies should not be allowed simply to import as many taxis as they like.
The standardization of fuel prices and quality in the Kurdistan Region along with moves to regulate supply to prevent fuel shortages in any part of the Region have had a positive impact.
A source from the Erbil Oil Products Distribution Directorate of the KRG Ministry of Natural Resources, has promised that price reductions will be consistent and that the next step will be to improve quality and increase quantity to meet market demands.
This file photos depicts cars driving in a Downtown Erbil street.