Fare call: Cabbies to receive LPG help

By Dong Zhen  |   2008-6-17  |     NEWSPAPER EDITION

SHANGHAI has received a double dose of good news on the taxi front -fares won't be going up and cabbies will be handsomely reimbursed for the increase in the cost of liquefied petroleum gas that became effective on Sunday.

The decision by city policy makers will come as a relief for the thousands of cabbies driving taxis using LPG.

The Shanghai Dazhong Taxi Company, which owns about 3,000 LPG-driven taxis in service in the city, said yesterday it heard of the new policy from local authorities.

While the schedule to distribute the allowance has not yet been announced by the Shanghai Price Bureau, it has reassured travelers that a fare increase is not on the agenda.

The monthly subsidy for each LPG taxi will be 1,800 yuan (US$261), made up of 1,700 yuan from the municipal government and 100 yuan from the relevant taxi company.

"Generally, the subsidy should be counted since the day of the new price increase,'' said Ling Dongshu, a Dazhong company official.

Restart urged

LPG cabbies will still receive the government fuel subsidy brought in last November of 250 yuan per month on each two-shift taxi.

The price bureau on Sunday increased the LPG price for taxis from 3.6 yuan per liter to 4.7 yuan and for mopeds from 4.2 yuan to 4.7 yuan.

The lack of filling stations and higher equivalent costs compared with gasoline have caused LPG taxis to quickly drop out of service.

City authorities are urging LPG stations to restart services quickly after they closed due to virtually zero profits in the face of the increasing global oil prices. The municipal government has also pledged to keep giving subsidies to LPG suppliers.

There are about 45,000 taxis in service in Shanghai.

Taxi fares were lifted in May 2006 when a new price-fixing system was introduced. The system takes into account the scale of impact on taxi operations from fuel-price increases and adjusts fares accordingly.

Shanghai started to promote the use of LPG fuel some years ago and invested in LPG stations across the city.

After the latest price lift, the 4.7-yuan-per-liter LPG cost is already very close to the 4.77-yuan 90-octane gasoline price.

The municipal government will have to distribute 50 million yuan annually to retain services of LPG stations.