The price of a bus ticket in Tauranga is set to rise by 40 cents if the Bay of Plenty Regional Council goes ahead with a report recommending an increase in fares.

The report – Bus Fare Increase 2012/13 – recommends an increase from the current $2.60 for an adult passenger ticket, to $3 if paid in cash.

The Bay of Plenty Regional Council is considering increasing the cost of a bus ticket by 40 cents if paid in cash.

The price of a ticket using the Smartride car will also increase from the current $2.08 to $2.40.

The report presented to the council's Public Transport Subcommittee states that bus services in the Bay of Plenty region are highly subsidised, with passenger fares making up about 30 per cent of the $10 million it costs to run the service.

Ratepayers and the New Zealand Transport Agency equally share the remaining 70 per cent of costs.

The report also shows that fares have not kept up with the rate of inflation since 2009, despite the fact that Regional Council has to make inflation payments to the operators of the services every quarter.

Bay of Plenty Regional Council Public Transport Subcommittee Chairman Doug Owens acknowledged that higher bus fares could be difficult for some passengers, but says higher fares are necessary to be able to continue and grow the region's bus services.

'If we don't retain a greater proportion of cash through fares we would need to look at cutting some services,” says Doug.

'This is about putting the service on a better footing so that it's in a strong position for the future. The days of high subsidies from Central Government have come to an end and we need to find our own way forward.

'We're trying to run more services for a record number of passengers, with increasing costs, but with about the same amount of funding.

'Fare increases will also bring Bay of Plenty bus fares into line with comparable services in other regions.”

Passengers travelling in Rotorua currently pay $2.30 cash and $1.61 with a Smartride card. Under the new fares, they will pay $2.50 cash and $1.75 with a Smartride card.

Doug says bus passenger numbers in the Bay of Plenty have increased significantly in recent years, with passenger numbers reaching record highs in both Tauranga and Rotorua in March. Services are reviewed regularly to ensure they are running as efficiently as possible.

'The record patronage we have seen cannot continue without investment. An increase in the amount of costs recovered from users is a necessary part of that investment package.”

Fare increases for Whakatane and the Eastern Bay are expected to be about 8 per cent.

The final decision on bus fare increases will be made a by full Council at a meeting on 16 August.