JEDDAH — The increase in fuel prices in the Kingdom will lead to a 10 percent rise in freight costs, according to a chamber official. Saeed Al-Bassami, head of the transport committee at the Jeddah Chamber of Commerce and Industry (JCCI), said he however expected the taxi fare in the country to remain more or less the same in the face of stiff competition. "The cabbies will most likely stick to their old prices because of the high competition. The supply in the market surpasses demand and the drivers would not risk losing potential customers," Al-Bassami said. Speaking to Saudi Gazette, he said transport companies will most likely honor their existing contracts for the movement of cargo with clients, but they will look to restructuring future contracts putting the new fuel prices in mind. "This will result in a 10 percent increase in truck renting prices," he said. Al-Bassami said the transport sector suffers from two main issues, in addition to the rise in fuel prices. He was referring to the high insurance prices and the Labor Ministry requirements that force companies to employ a certain percentage of Saudis and pay an annual fee of SR2,400 for each expatriate employed. He called on SAMA to reconsider the insurance prices for the transport sector to survive and demanded that the Ministry of Labor review its Saudization regulations. In a statement issued two months ago, the transport committee at the Council of Saudi Chambers criticized insurance companies for hiking their prices, which he said was a big challenge for the sector. According to the committee's figures, up to 15 percent of investors in the sector were forced out due to the challenges from the labor regulations and insurance costs. The statement called on SAMA, the agency responsible for insurance companies, to put a cap on insurance premiums, which jumped by 400 percent in some cases.
