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<p>The bus market outside London is deregulated, with the vast majority of services
provided on a commercial basis by private sector bus operators. Decisions on the level
of fares is a commercial one for individual bus operators.</p><p> </p><p>The Department’s
own analysis suggests that the 25% reduction in fuel price earlier this year could
translate into around a 4.25% reduction overall in bus industry costs. However, most
large bus operators, who between them provide the majority of services outside London,
have fuel hedging arrangements in place, which mean that, in the short term, lower
fuel prices do not translate into lower costs thus limiting their ability to reduce
fares.</p><p> </p><p> </p>
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