Smoother ride over fuel price hikes

The State Government will change the way it funds school and urban regional bus services to help operators cope with volatile fuel prices.

Transport and Main Road Minister Paul Lucas says the change from an annual to a quarterly review of fuel costs, beginning from this month, would help operators to smooth out price "spikes".

"We all know how volatile the fuel market is and how much prices can jump from week to week before coming back to realistic levels," Mr Lucas said.

"The price hikes are bad news for an operator struggling to keep buses on the road and provide a vital service for Queensland."

Spikes in the cost of fuel can put pressure on fares but the funding Queensland Transport provides each year to regional passenger and school bus operators helps to alleviate that so public transport remains affordable for communities.

This week's budget shows the state government expects to spend $136 million next financial year on its support for regional passenger and school bus services.

"In the past, the State Government has adjusted funding levels each January to take account of a more gradual increase in fuel costs – although there have been mid-term reviews, as happened in 2005 and last year, because of occasional price hikes," Mr Lucas said.

"There's been a lot more volatility in the cost of fuel for consumers over the past 12 months, hence this new arrangement. The requirement for those mid-term reviews will now be put on a systematic, more frequent basis.

"From July 1, the fuel costs of operators will be reviewed every three months instead of annually, and payment adjustments, up or down, will be made at that time.

"No longer will operators have to carry price hikes over long periods," he said.

"This new system responds to the needs of the industry, and therefore the interests of passengers and communities, throughout Queensland.

"School and regional urban bus services are an essential element in Queensland's economy and lifestyle and we must ensure such services remain viable throughout the state."

Media inquiries: Robert Hoge 3237 1942