Truckers hint at 7-10% hike in rates

Large transporters believe that the latest price hike of diesel will mean around 7-10 per cent increase in the freight rates on major truck routes across the country.

Sections of the goods transportation industry, while disagreeing on the exact amount of change in freight rates on major routes, expect the diesel price rise to be passed on to end users.

It is estimated that the average running cost, which includes diesel and lubricant, is up 45-50 paise per km. The price of diesel and petrol was increased by Rs 2 and Rs 4 per litre, respectively, yesterday.

The average price increase in diesel in the four metros is around 6.6 per cent. The overall increase in major markets like Delhi is effectively a little over 25 per cent, if diesel price in April 2005 is taken as base.

K Prabhakar, president & CEO, XPS, the express delivery division of Transport Corporation of India, said, "Large corporations like ours can hold on to the old price for a month or so. But the small fleet operators wouldn't be able to do so. The overall increase in freight cost on major routes could be as much as 10 per cent."

Indian Foundation of Transport Research and Training said freight cost need not go up by more than 1-2 per cent as the freight structure of transport and large logistics companies allows 5-6 per cent increase in truck rentals to be absorbed.

"Bulk consignors have already factored in the expected diesel price increase to the tune of Rs 2.50 to Rs 3 per litre while the actual increase is only Rs 2 per litre."

"Since October 2005 truck rentals have gone up by 15 per cent despite no increase in diesel price till the latest round of increase," said SP Singh, senior fellow and coordinator, IFTRT.

Singh said the increase in fuel price is supported by buoyancy in the manufacturing sector as this sector is growing by over 9 per cent along with a GDP growth rate of 8.4 per cent.