Bus owners are putting pressure on the Bangladesh Road Transport Authority (BRTA) to set higher fares, not only due to the increased price of diesel but also by adding various other costs. The BRTA-led bus fare re-fixing committee is also giving in to the demands and has proposed to set fares by taking into consideration additional expenses beyond fuel. Some of these costs are described as “phantom expenses,” which reportedly have no actual existence.
The committee has proposed increasing bus fare by 22 paisa per kilometre. However, considering only the rise in diesel price, the fare increase would be 15 paisa per kilometre. Owners are citing increased costs of spare parts, engine oil, tyres, tubes, lubricants, and bus chassis (including engine and structure), and have proposed fare adjustments accordingly.
People concerned said that if the government had not increased fuel prices, the discussion on fare hikes would not have arisen. Owners are reportedly taking advantage of the situation. In 2022, after a fuel price hike, they used a similar approach to increase fares and later charged even higher rates in Dhaka city.
Currently, the fare for buses and minibuses in Dhaka and Chattogram city corporations is Tk 2.42 paisa per kilometre. If the new proposal is implemented, it will rise to Tk 2.64 per kilometre. For intercity routes, the current fare is Tk 2.12 paisa per kilometre, which is proposed to be increased to Tk 2.34.
Previously, separate fares were set for minibuses in Dhaka and Chattogram, but this time no separate proposal has been made. Generally, minibus fares are slightly lower.
According to the Ministry of Road Transport, after the diesel price increase, the BRTA-led fare review committee met on Sunday. The committee sent its proposal to the ministry on Monday. However, no decision was taken as the minister Sheikh Robiul Alam and secretary Mohammad Ziaul Haque were outside Dhaka.
On Wednesday afternoon, the minister held a meeting at the secretariat, attended by leaders of transport owners and workers’ organisations, but no new fare was announced.
In Dhaka, new buses worth Tk 3.5 million are rarely seen. Most buses and minibuses are old, worn out, and poorly maintained, with faded paint and torn seats. The government has lawfully allowed buses in Dhaka to operate for up to 20 years, but fares are calculated assuming a 10-year lifespan.
Sources concerned said say that the road transport minister wants to discuss the matter at the government’s higher level, after which a final decision could be announced. After the meeting, Road Transport Minister Sheikh Robiul Alam told journalists that discussions on fixing fares have taken place, but no final decision has been made yet. A final decision on bus fare adjustment in the context of rising fuel prices may be reached today, Thursday.
Owners’ representation outnumbers passengers’ in committee
The bus fare re-fixation committee consists of 11 members. Among them are three from BRTA, one from the Ministry of Road Transport, one from the Dhaka Transport Coordination Authority (DTCA), and one from the Rupantarita Prakritik Gas Company (RPGCL).
From the owners’ side, there are effectively four members: JR Shahid, Chairman of Bangladesh Bus Truck Owners Association; Saiful Alam, General Secretary of Bangladesh Road Transport Owners Association; MA Baten, President of Dhaka Road Transport Owners Association; and Shukdev Dhali, Deputy General Manager of government transport agency BRTC.
There is only one passenger representative, lawyer Bahadur Sajeda Akhtar, representing the consumer rights organisation Consumers Association of Bangladesh (CAB).
The cost analysis committee was headed by BRTA Chairman (additional charge) Mir Ahmed Tarikul Omar. In addition to committee members, some transport leaders also joined the meeting online.
We had said not to increase fares. If absolutely necessary, only the rise in diesel price should be considered. But additional costs have been added and a higher fare has been proposed.
According to meeting sources, Monwarul Islam, representative of RPCGL, said that the analysis of fuel and other costs was not consistent and requested that fares be made more reasonable.
DTCA representative KM Toufiqul Hasan said that fares should be revised only based on the increase in diesel prices, without considering other costs.
However, most other members supported increasing fares by including non-fuel costs as well. The BRTA has prepared the proposal accordingly and sent it to the ministry.
At the meeting, BRTA Chairman (additional charge) Mir Ahmed Tarikul Omar said that fares would not be increased in a way that harms owners. At the same time, he noted that excessive fare increases could create negative reactions among the public.
Questions raised over justification
Questions have been raised about the justification of the additional fare proposal made by the BRTA committee. Allegations have been made that many “phantom expenses” are included in the cost analysis used to determine bus and minibus fares. Similar complaints have also been raised this time.
In determining fares, the cost analysis committee considers 12 factors related to buses and minibuses and their investment. These include the time of bus purchase, its lifespan, passenger seating capacity, and the rate of passenger occupancy per seat. In addition, around 20 operational cost items, including fuel expenses, are taken into account. An analysis of this fare determination system shows that some of the costs shown for bus operations do not actually exist.
According to the latest BRTA bus fare cost analysis, a new bus operating in city areas is priced at Tk 3.5 million. The bank loan interest over five years is Tk 1.05 million. In total, the investment in a single bus is estimated at around Tk 4.6 million. The bus is assumed to operate for 10 years. During this period, it is assumed that the buses will undergo renovation once every five years, costing Tk 650,000. The fare proposal has been made based on these assumptions.
However, in Dhaka, new buses worth Tk 3.5 million are rarely seen. Most buses and minibuses are old, worn out, and poorly maintained, with faded paint and torn seats. The government has lawfully allowed buses in Dhaka to operate for up to 20 years, but fares are calculated assuming a 10-year lifespan. This means buses aged between 11 and 20 years can still charge the same fare as new ones.
Driver salaries, assistant wages, and two festival bonuses per year have been included in the cost structure used for fare calculation. However, transport workers say there is no evidence that such bonuses are actually paid. In most cases, there is also no regular monthly salary system in practice.
At the time of fare determination, it was stated that buses would undergo maintenance every 25 days and every 3 months. An estimated cost of around Tk 61,000 has been included for this. However, there is no clear evidence that such maintenance expenditure is actually being carried out for buses in Dhaka.
An additional cost of Tk 50,000 has been included for garage and terminal parking of city buses. But in reality, most buses in Dhaka do not have separate garages and are parked on the roadside. An annual engine overhaul cost of about Tk 300,000 has also been included.
Driver salaries, assistant wages, and two festival bonuses per year have been included in the cost structure used for fare calculation. However, transport workers say there is no evidence that such bonuses are actually paid. In most cases, there is also no regular monthly salary system in practice.
Abdur Rahim Bux, acting president of the Bangladesh Road Transport Workers Federation, told Prothom Alo that many things are written during fare determination, but workers do not actually receive them. Workers earn only when they drive; otherwise, they receive no payment.
Similar “phantom expenses” are also included in long-distance bus fare calculations.
Previous fare fixing
In August 2022, the price of diesel was increased by 42 per cent to Tk 114 per litre. At that time, the government increased bus fares by up to 40 paisa per kilometre, or about 22 per cent. Last Saturday, the price of diesel was raised again to Tk 115 per litre. This means that compared to the 2022 cost analysis framework, the diesel price has increased by Tk 1 per litre.
Most of the country’s goods and passenger transport operates on diesel. Among them, the government does not set fares for freight vehicles such as trucks and covered vans. The Bangladesh Road Transport Authority (BRTA) only fixes fares for non-air-conditioned buses and minibuses.
Two years later, on 1 April 2024, the price of diesel was further reduced by Tk 3 per litre to Tk 106. On that day, a decision was also made to reduce transport fares by 3 paisa, but it was not implemented. Earlier, bus fares were reduced by 3 paisa in 2016 and by 2 paisa in 2011, but transport owners did not follow those decisions either.
After the diesel price increase in August 2022, the government reduced the price again within 25 days. On 29 August, the price per litre was reduced by TK 5 to Tk 109. Following this, on 1 September, the government decided to reduce bus and minibus fares by 5 paisa. However, transport owners and workers did not comply with this decision.
Two years later, on 1 April 2024, the price of diesel was further reduced by Tk 3 per litre to Tk 106. On that day, a decision was also made to reduce transport fares by 3 paisa, but it was not implemented. Earlier, bus fares were reduced by 3 paisa in 2016 and by 2 paisa in 2011, but transport owners did not follow those decisions either.
Relevant individuals say that the new government should analyse the entire situation. They should verify whether the past cost structure is accurate, and then hold discussions with experts to determine a rational bus fare.
A member of the fare re-fixation committee and CAB representative Bahadur Sajeda Akhtar told Prothom Alo that people are already suffering and an increase in bus fares would be “add insult to injury.”
She said, “We had said not to increase fares. If absolutely necessary, only the rise in diesel price should be considered. But additional costs have been added and a higher fare has been proposed.”