Big carriers Dumagas, Dunca and Lazăr: Fuel becoming more expensive is forcing us to hike tariffs

Autor: Neagu Lidia-Ileana 13.03.2011

Road carriers are expecting their profits to decline this year because of the increase in fuel prices, with some companies expected to go bankrupt after their earnings were affected by the VAT increase and the leu depreciation last year, as well.

"A 10% increase in the price of fuel leads to an average 4% increase in the costs of a carrier. It is clear that profit will decline because the market cannot respond positively and cover the costs. Our clients cannot afford to increase shelf prices so we cut margins. Under the circumstances, and considering that the past three years have not been good for carriers anyway, many will not make it on the market," said Lucia Apostol, transport manager at Dumagas.

She said fuels account for nearly half of the company's costs.

"We are the most affected while at the same time being the main driver of a country's economy. An average of 45% of overall costs are accounted for by fuel costs. If this percentage rises any further, I think many companies will end up on the bankruptcy list," said the Dumagas representative.

The executive manager of Dunca Expediţii company, Constantin Daminescu, shares the same view, saying his company's profit margin is 1 to 5%, so fuel becoming more expensive affects the company directly.

International Lazăr Company carrier, too, says all companies were already having a difficult time, and that the increase in the price of fuels will lead to a profit decline.