Increase in Electricity and Fuel Costs for Public Transport Operators Year-to-date and Expected Proportion Offset by Subsidies

Ms He Ting Ru asked the Minister for Transport in relation to the additional $200 million in subsidies to cover the increased costs to public transport operators due to the doubling of energy prices (a) what is the increase in electricity and fuel costs for public transport operators year-to-date; and (b) what proportion of the increase in energy costs are the additional subsidies expected to offset.

At the 2022 Fare Review Exercise (FRE), the Public Transport Council (PTC) indicated that the maximum allowable fare adjustment quantum under the current fare formula was 13.5%. The fare formula broadly reflects the increases in public transport operating costs due to inflation, rising manpower costs and higher energy prices.

To keep fares affordable for commuters in the current economic circumstances, the PTC decided to grant a fare increase of 2.9%, with the remaining 10.6 percentage points carried over to future FREs.

The additional subsidy of about $200 million is to cover the revenue shortfall arising from this carry-over and not aimed at defraying any specific cost item. Together with the fare increases, it helps to cover various operating cost increases, including electricity costs for rail and fuel costs for buses.