Frequency of tariff adjustment

Where fares are subject to controls, some mechanism is then required for their adjustment in the face of unavoidable externally-driven changes in input costs, e.g. for fuel. Should such a mechanism not be available, there would need to be either balancing changes in the level of external support or an adjustment in the quality and/or quantity of the service offer.
Passenger transport fare levels are a highly sensitive political issue, as noted earlier, and there is a temptation to resist increases on populist grounds. As such, the most effective modalities for tariff adjustment involve fixed legislatively or contractually schedules for review and / or stated levels of cost increases that can trigger such a review. There can, in fact, be political advantages in this approach in that the responsible authority can claim that it has no alternative but to accept the provisions.
Experience has shown that infrequent reviews in the face of rapidly rising costs can result in consequent fares adjustments that are very difficult for passengers to absorb, and it is better to have more frequent adjustments with each then being less significant in personal budget terms. Such an approach also allows for fares reductions on those rare occasions when the costs of external input factors, such as fuel prices, actually reduce.