Fuel price rises won't mean dearer taxi fares

By Dong Zhen  |   2008-6-21  |     NEWSPAPER EDITION

TAXI fares will not be going up in Shanghai despite the recent increase in fuel prices.

Cabbies will be compensated for the extra they have to pay, city officials said. The compensation package, under discussion by decision makers, would be announced soon.

Ai Baojun, vice mayor of the city, said yesterday that Shanghai would step up supervision of the fuel market across town to ensure a stable supply, while confirming that "the taxi fare will not be lifted at present."

The vice mayor said the increase in oil prices was good for energy conservation.

Starting from yesterday, gasoline prices were increased from 15.5 to 16.8 percent while diesel got a 17.8-percent mark-up.

The cheapest two types of fuel that cabbies generally use, 90-octane and 93-octane petrol, increased from 4.77 and 5.19 yuan per liter to 5.57 and 6.05 yuan, up by 16.8 and 16.6 percent.

The increases translate into an extra monthly cost of between 600 to 700 yuan on average for a cabbie who works every other day.

Jin Kangsheng, a veteran driver with the Dazhong Taxi Company, said he believed the city government would provide enough help to shelter them from the fuel price impact, "just as before."

"Actually, the drivers had been calm about the recent predictions of a fuel increase because we believe there would be new subsidy to make up our losses," Jin said.

However, he was worried that if fares were increased in future as a way to replace the fuel subsidy, they would suffer a loss of business.

There have long been calls from local cabbies that taxi companies should lower the level of fixed monthly commission they take from taxi revenues instead of leaving drivers, passengers or the government to shoulder the burden of price increases at the pumps.

"Compensation will continue to be the way to cover up the cabbies' income loss before the taxi fare is adjusted,'' said Lang Dongshu, an official with Dazhong Taxi Company.

Shanghai launched a price-fixing system for the taxi industry to tie fares to fuel prices in May, 2006.

Currently, each two-shift taxi in Shanghai is entitled to a monthly subsidy of 250 yuan.

Dazhong said drivers of its 3,400 LPG-driven taxies will receive an LPG-fuel allowance by the end of this month under a new policy announced earlier this week.

Each taxi will get 1,800 yuan a month. The local price bureau increased the cost of LPG from last Sunday.