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Maintaining cab fares through LPG conversion
Taxi operator PT Express Transindo Utama is converting its cars to use liquefied petroleum gas (LPG) in an effort to maintain fares after the recent fuel price increase
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Taxi operator PT Express Transindo Utama is converting its cars to use liquefied petroleum gas (LPG) in an effort to maintain fares after the recent fuel price increase.
Operational director Herwan Gozali said the company would convert 437 taxis every month starting from July to lower operational costs.
The company, which operates Express taxis, is now arranging necessary permits to have their own LPG stations at its seven car pools throughout the city.
"We don't plan to raise fares because we don't want to lose customers," Herwan said Wednesday.
The company is currently charging a flag fall of Rp 4,000 (42 US cents).
With about 3,000 taxis, the program is expected to be completed early next year, said Herwan. The company now has 430 taxis run on compressed natural gas (CNG).
Herwan said by converting to LPG, the company could reduce operational costs by 20 percent.
"It would be far more efficient to use LPG after the recent fuel price increase," he said.
Herwan said the company would invest between Rp 12 million and Rp 15 million to purchase a converter kit for each taxi.
The government has raised fuel prices by up to 28.7 percent to cut fuel subsidies in the state budget. The move has triggered increases in public transportation fares in the city.
Taxi companies in the city are retaining their rates while negotiations between their representatives in the Land Transportation Owners Organization and the administration continue.
Major player Blue Bird Group said the conversion was costly, despite concerns about rising fuel prices.
"We tried using CNG a long time ago, but the availability of supplies was an obstacle. The price of the converter kit is also expensive," the company's spokesman Teguh Wijaya said.
He also said there was a possibility CNG prices would increase, so the company did not see it as a solution in cutting its running costs.
Teguh said the company would likely apply the new rates to solve the problem.
"Operational costs increase along with the price of fuel. We are now paying Rp 1,500 more per liter of fuel for our 10,000 taxis," he said.
Blue Bird currently has a Rp 5,000 flag fall.
Taxi companies Gamya Group and Putra Group said they were waiting for Blue Bird's decision on new rates. If Blue Bird raises its rates, they will do the same.
The Jakarta Mining Agency has been assisting gas conversions for taxi companies since last year by offering free converter kits for 1,755 taxis as part of its program to reduce air pollution in the city.
Agency head Peni Susanti said the lack of gas stations providing CNG and LPG was an obstacle in the gasoline phase-out in public transportation.
However, she said the administration has tried to lure more investors to build the stations.
"Several investors have asked for permits to build 500 units of natural gas stations," she said Wednesday.
The agency recorded only seven fuel stations in the city equipped with a CNG dispenser. (lva)
