Rupiah Weakness Signals Bus Ticket Prices Are Set to Rise

JAKARTA, KOMPAS.com - Rupiah’s instability against the US dollar is starting to impact the land transport sector. The Indonesian Young Bus Entrepreneurs Association (IPOMI) has signalled imminent adjustments to bus ticket prices. The move must be taken by bus company owners (PO) to safeguard ongoing operations, as maintenance costs are being squeezed by higher prices of imported spare parts.

IPOMI chairman Kurnia Lesani Adnan said the Rupiah fluctuation significantly affects the price of vital components and bus lubricants in the market today.

Sani added that other components such as tyres are also confirmed to rise by about 20 percent this month.

So far, PO bus operations have been helped by spare parts distributors still selling old stock. But if that stock runs out, future price rises for components are deemed unavoidable.

“In short, even before fuel prices rise we already have to adjust. Not to raise, but to adjust. My estimate for now is roughly 30 to 40 percent to be adjusted,” Sani said.

At the same time, owner of PO Sumber Alam Anthony Steven Hambali claimed that bus operators are currently carrying out various efficiencies so as not to burden customers with costs straight away. One way is to trim the number of running vehicles.

“We cut operations. For example, from 20 units pared down to 15 or 12 units per agency. This also reduces the use of spare parts and other things; adjust first. That is our most logical survival method,” Anthony said.

The burden on bus operators is becoming heavier due to the accumulation of toll tariff increases on several routes and the planned increase in VAT. Toll and fuel costs are the largest direct cost components, absorbing 40 to 45 percent of running costs.

“We can operate now, but if there is no adjustment to fares, we will not be able to maintain our fleet later,” Sani said.