Page 33 - Policy Economic Report_Mar'25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Airline and train companies often charge a higher price to travel during rush hour on Monday through
Friday than at other times. They may also have different prices for weekends or trips that include a
weekday plus a weekend.

Advantages of Congestion Pricing

? The benefit of congestion pricing is that it controls congestion on the roads, reducing stress and
delays.

? Higher prices also lead to an increase in revenue. Money collected from tolls can be used for
road and public transport improvement and this can give commuters other options for transit to
and from the city.

? Congestion pricing also helps to reduce pollution and the consumption of energy. Pulling cars off
the roads means fewer exhaust fumes. Charging more for electricity when resources are already
strained during peak times can influence consumers to spread out their usage to other times.

Disadvantages of Congestion Pricing

? Critics of congestion pricing argue that it puts a heavy burden on people who drive and may
financially impact those who fall into lower-income ranges more than others.

? It may increase revenue but the cost to oversee and administer congestion-pricing plans can be
hefty. "Transfer" costs are common such as those charged for processing payments and moving
the funds to other government entities. Authorities may have to pay for new technology and
salaries for new workers as well as financing billing needs and other ways to account for those
who evade payment.

Example of Congestion pricing

Rideshare companies such as Uber (UBER) aggressively apply surge pricing during peak hours. The
companies say that this pricing structure is in response to the high demand during rush hour, periods of
bad weather, and during times of special events. It aims to reduce traffic congestion and improve air
quality while helping to boost the city’s public transit system.

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