Will falling oil prices cut transport costs?


The recent fall in oil prices has caused a direct decline in fuel costs, causing Beijingers to wonder whether or not the city’s taxi fuel surcharge will also fall.

A drop of around 0.43 yuan per litre of oil means drivers are set to save around 400 yuan per month. The savings come after a sustained period of rising oil prices, which have caused taxi prices to rise through much of China

The country’s top economic planning body, the National Development and Reform Commission (NDRC), has said that fuel surcharge rates are directly linked to oil prices. Therefore, if oil prices decline, so too should surcharges, though the final decision rests with local government. 

Obviously, taxi drivers aren’t the only people affected. For a private car with an average monthly mileage of 2000 kilometres, and an average consumption of nine litres per 100 kilometres, monthly fuel costs are down by around 75.6 yuan. 

Among long-distance bus drivers, news of the price fall met a mixed response. In the fourth quarter of last year, after the NDRC lowered oil prices, a surge in demand triggered domestic fuel shortages, with serious implications for logistics firms. The latest decline has caused companies to worry they could be in for another round of the same. 

A long-distance truck driver named Mr Gu said that, the lower prices fall, the more worried he gets. After NDRC cut the diesel price last year, Gu recalls, cars were often lined up for several hours at the Sinopec or PetroChina depots, waiting for tankers to arrive. A spending limit of 300 to 500 yuan was imposed. The fuel you could buy with that would only get you so far before you had to stop and queue up all over again, he said.

In order to save time and decrease the number of refuelling stops, Gu went to several small private filling stations. But these provided only low quality oil, and charged additional fees. Gu worries he could now face the same problems again.

Translated by chinadialogue volunteer Tanya. Mayo Bruinsma