Truck rentals and retail parcel freight rates are set to increase four per cent and 1.5-2 per cent, respectively, following a hike in diesel prices by Rs 3.37 per litre by public sector oil companies since Friday night, according to the Indian Foundation of Transport Research and Training. The hike in diesel as a key variable cost component of trucking business has only a four per cent weighted impact over the prevailing truck rentals across the country.
The study conducted after the Centre’s announcement said during 2005-11, the diesel prices have gone up from Rs 30.28 per litre to Rs 37.75 per litre (ex-Delhi), an increase of 25.7 per cent. The truck rental has increased by 55-60 per cent during this period. The tyre prices have also shot up by 40 per cent, truck chasis 20 per cent, bank interest cost 3.5 per cent and driver salaries by 20 per cent. However, from October 2009-March 2011, the truck rentals have outpaced the increase in input cost and have remained overheated on the back of a robust gross domestic product growth.
Till last month, more than 20 per cent of long-haulage trucks migrated back to short-/medium-haulage to carry perishable fruits and vegetables, along with a demand from wheat-procuring states. The truck rentals on trunk routes have dropped 2.5-3 per cent since June 1, as with the onset of monsoon in several states, fruit and vegetable arrival has gradually dropped by 10-15 per cent and manufacturing sector seems to be sinking in its growth leading to lower availability of cargo on medium- and long-haulage. “Therefore, the present moderation in truck rental in the current month was much overdue and has come now due to slackness in manufacturing sector,” said S P Singh, senior fellow and coordinator at the Foundation.
| EXPENSIVE RIDES Rental movement (per round trip) | ||||
| Trunk Route Round trip 9 ton pay laod | Rental 31-May | Rental 24-Jun | Estimated rental post diesel price rise | Weighted impact increase of Rs 3.37 diesel rise |
| Del-Mum-Del | 55,400 | 53,700 | 55,800 | 2,100 |
| Del-Nagpur-Del | 53,500 | 51,900 | 53,900 | 2,000 |
| Del-Kolkata-Del | 56,150 | 54,450 | 56,550 | 2,100 |
| Del-Guwhati-Del | 99,200 | 96,200 | 100,000 | 3,000 |
| Del-Hyderabad-Del | 74,200 | 72,300 | 75,200 | 2,900 |
| Del-Chennai-Del | 86,100 | 83,900 | 87,300 | 3,400 |
| Del-Bangalore-Del | 84,250 | 82,150 | 85,300 | 3,150 |
| Del-Ranchi-Del | 54,300 | 52,900 | 55,150 | 2,250 |
| Del-Raipur-Del | 53,200 | 51,600 | 53,700 | 2,100 |
| Del-Kandla-Del | 40,200 | 39,200 | 40,800 | 1,600 |
| Del-Bilaspur-Del | 52,800 | 51,300 | 53,100 | 2,000 |
| Source: Indian Foundation of Transport Research and Training | ||||
Singh said the Centre’s decision to increase diesel prices from Friday and rejig Customs and excise duties were only a piecemeal effort rather than moving towards major reforms in oil pricing and decontrol.