After showing a downward trend for a few months, truck rentals rose 4.5% to 5.5% across all routes at the beginning of March. The sudden spike can be attributed to the diesel price hike of R3.09 a litre, said Indian Foundation of Transport Research and Training (IFTRT) in a report on Thursday.

The report said the rentals fell between 3.5% and 4.5% across all trunk routes till February-end on falling diesel price and subdued cargo offerings from the manufcturing sector.

The rentals rose 4.5% to 5.5% on leading trunk routes beginning March, primarily on the twin price hikes of R3.09 a litre on February 28  — after the finance minister presented the annual Budget — and R0.61 in mid-February, the report said.

According to the Foundation, while cargo freight availability to truckers in February 2015 (February 2 to March 1, 2015) was steady from fruit and vegetables to APMCs across the country. As the R3.09/litre increase in diesel price last weekend was immediately translated into a 4.5%-5.5% increase in truck rentals effective March 2 as truckers/transporters were expecting strong upsurge in cargo offering from factories on account of year-end rush to push out extra production to the distribution centres in the country.

The diesel price reduction spree ended last month when R0.61 a litre price hike was announced mid February  and two weeks later R3.09/litre hike on February 28 as international Brent Crude oil price has recovered to $61 which led OMCs to stop fuel price cut.

The Budget announcements of R8.5 lakh crore spending on Railways, acceleration of east and west dedicated freight corridors project, 1.04 lakh km of highway construction in next 5 years, allocation of R14,000 crore for FY16 and R70,000 crore in the next 5 years along with introduction of GST from next fiscal have sent strong signal for growth and speed for trucking industry.

The carriage by road act, proposed road transport and safety law along with GST will combine to have strong shaking impact on the trucking business, which may result in start of consolidation process and changes in the fleet owning pattern of different cargo vehicle segments, IFTRT said further.