Inflation tsunami : buses fares increase by 21 %

The ministry has allowed passenger buses in Bangkok to hike their fares by between one to 1.50 baht out of sympathy for the bus operators who cannot cope with soaring diesel prices.

The fare hikes are expected to take effect by May 25 after being formally endorsed by the central transport committee on May 20, the ministry said.

For non-airconditioned buses, mainly serving low-income earners, the fare will go up by 1.50 baht. Red-cream buses will charge 8.50 baht, up 21% from seven baht now and blue-cream buses 10 baht from 8.50 baht, up almost 18%.

Fares for air-conditioned buses will rise by one baht, from 12-24 baht to 13-25 baht depending on distance. (Bangkok Post)

Here we come. What I’ve been saying since a few months is happening.

The “postponement policy” of the government starts to go wrong. The short term dope-fix effect is vanishing… Now it’s back to reality. And the reality has an ugly face : inflation.

Low-income earners cried foul over the latest bus fare hikes. They insisted that the government’s sympathy for the bus operators is pushing them closer to the financial brink.

Nonglak Buakam, 39, a factory worker, said the bus fare hikes would make his minimum daily wage increase _ granted on Labour Day and due to take effect on June 1 _ meaningless.

Her wage increase was nine baht, the rate for Bangkok and its surrounding provinces. Wage hikes vary from two to 11 baht depending on the province.

”I was upbeat that the daily wage is going up nine baht. And then the government said it was pushing up bus fares,” complained Ms Nonglak, who said she would need to pay at least six baht more for bus tickets a day and even more if she changes buses often.

Ms Nonglak said the government should have frozen bus fares to help poor people.

This worker has just discovered the principle of inflation… and its secondary effects.

Naive, he thought that the “wage hike” was a real oneOf course not. It’s just inflation added to… inflation.

As for his idea to “freeze” the fares… well we saw the result. And furthermore, BMTA was already in deficit. It looses 400 millions THB per month (read here). The public company is a disaster.

So what this worker will do ? Ask… for more wage hike. That he’ll probably get… And what will do the businesses, with higher costs ? They will increase their prices etc.

It’s Economy 101. We are playing with gravity and common sense since too long.

Now, It’s check bill time.

UPDATE
I love this country. After the decision, an “Anti-Fare Rise Group” was created. They even have a “leader” : Bunchai. And mister Bunchai is very adamant : “If the Board of Land Transport approves the fare increase proposal, Bunchai says the group will file a suit with the Administrative Court against the unfair fare increase, together with 20-thousand signatures to sack the transport minister.” (TOC)

He’s probably thinking that the best way to deal with the problem is to declare inflation of prices… illegal !

He should go to Zimbabwe for a little training course about inflation. He could learn many things. 😉

UPDATE MAY 21
The Central Land Transport Committee approved the new fares. They will take effect on May 25 (Nation)

4 Responses to “Inflation tsunami : buses fares increase by 21 %”


  1. 1 fall 18 May 2008 at 7:26 am

    Does not the word “Cut cost” or “Increase efficiency” have any meaning to these guys? What’s the point of giving route concession if the private sector does not contribute good governance and control?
    Just take the concession back, use the money, build a god-d*mn sidewalk escalator and be done with it.

    P.S. – with Burma unable to plant rice this crop. Hope the government have half a brain to plan ahead for the coming effect on rice.

  2. 2 thaicrisis 18 May 2008 at 7:40 am

    If only it was a matter of cost cuttings… 😉 Of course it doesn’t help.

    But I really do believe that we are now beyond this line.

    With the fuel issue, they could cut whatever they want : prices would have to go up.

    This is the trap.

    Since already one year, privates companies (and public too) have done some work of cost cuttings… And reduced for some of them their margins too…

    And this is why it’s frightening.

    We don’t have anymore a large cushion to absorb the oil shock. At one point, you can’t cut more. You are touching the bone of your business if I may say !

    This is what the gvt doesn’t understand. It’s not possible anymore to postpone.

    Prices of many products and services are going to increase more. Wages will follow… to some extend… adding more gasoline on the problem.

    It’s exactly the principle of inflation tsunami I’ve described before.

  3. 3 fall 18 May 2008 at 4:20 pm

    It’s frustrating to have minister with highschool understanding of economics. That’s what you (people) get for choosing populist government. Too bad we can’t do smack, at least I still get my kick from some schadenfreude.

    Your blog start to read like Rules of Lord (gloomy, sad prediction, post-apocalypse future). Not that I wont read though…

  4. 4 thaicrisis 18 May 2008 at 4:28 pm

    I agree that , overall, the “level” of thai politicians (and civil servants, that’s another big problem) is… low. This is obvious.

    But, I do think that there is a political will too. As you say, we have a populist gvt… therefore their actions are not really surprising.

    “Short term… No real change… And we will see tomorrow.”

    What I try to show on this blog is that the outome of those policies (or I should say “non-policies”) is likely to be a failure.

    As for my “gloomy” bias, it’s not new dear Fall.

    I’ve created this blog exactly one year ago, with a very precise angle (a gloomy one) : the royal succession.

    Overall, I was right. The royal succession was and remains the core issue. More and more people start to understand this.

    I agree though that with the oil problem and the poor level of policies of the Junta and the current gvt, my blog is getting depressing. I’m a really depressed myself !
    😉

    I apologize, but that’s the way is see the current situation.


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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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