• No bus fare hike; school transport hike in February

Several three wheeler drivers’ associations yesterday (1 January) announced that three-wheeler fares will be increased by Rs. 20 from the second kilometre (km) following the Government’s recent policy to increase the value-added tax (VAT) by 3%, from 15% to 18%.

Speaking to the media yesterday, United National Three-Wheeler Drivers’ Association Secretary L. Rohana Perera stated that they were planning to increase the three-wheeler fare by Rs. 20 for the second km, yet there would be no fare hike applied for the first km. Accordingly, the second km will be Rs. 100 from this week onwards.

This marks the first time three-wheeler fares were increased since 2022. In the middle of last year (2023), three-wheeler associations reduced three-wheeler fares after considering the Government’s decision to reduce the prices of petrol and increase the fuel quota. Accordingly, the minimum fare for the first km was reduced to Rs. 100 from Rs. 120 while the second km was reduced to Rs. 80 from Rs. 100.

Meanwhile, the Lanka Private Bus Owners’ Association yesterday told the media that there will be no bus fare increase following the VAT increase. Speaking to the media, the Association’s Chairman Gemunu Wijeratne said that they had no capacity to increase bus fares according to their fare-related policies. “Last month (December 2023), diesel prices were slashed, but we didn’t reduce bus fares. This time, they have been increased. Therefore, there is no possibility to go for a fare hike. Bus fares will not be increased,” he said.

Further, National Transport Commission Chairperson Shashi Welgama said that despite the rise in fuel prices, there will be no corresponding increase in bus fares. In a statement, Welgama clarified that although the price of a litre of a certain type of diesel had reached Rs. 358 as of yesterday, bus fares would remain unchanged. 

However, the All Ceylon School Children Transport Association has decided to increase school transport charges from February. The Association’s President Lalith Fernando said that they will work to inform parents about the increased percentage at the beginning of the new school term. He said that due to the implementation of the new VAT amendment with effect from yesterday, prices of vehicle parts and fuel have also increased. He said that due to this, transport charges would definitely have to be increased.

Nevertheless, the Ministry of Finance, Economic Stabilisation, and National Policies recently clarified that the Ports and Airports Development Levy (PAL) currently imposed on fuel and gas is set to be removed upon implementation of the revised VAT. Accordingly, the 7.5% PAL on fuel and the 2.5% PAL imposed on liquefied petroleum gas would be lifted when the increased 18% VAT came into effect from yesterday.