Extra 1 yuan to buffer fuel costs

Extra 1 yuan to buffer fuel costs

• Source: Global Times
• [08:34 March 18 2011]
• Comments

People walk toward a taxi stand at Beijing Railway Station in October 2010. Photo: Wang Zi

By Yang Jie

Experts suggest that the base fare of Beijing taxis should be raised by 1 yuan ($0.15) in order to compensate for the several recent increases in oil and gas prices.

The new fare would not only translate to an average 500 yuan per month increase in income for drivers, but would also mitigate the frequency of fare adjustments due to gas price fluctuation, according to a Beijing Economic Information Center report.

The report, released Wednesday, analyzes the impacts of recent oil prices changes on China and Beijing.

The center is affiliated with the Beijing Municipal Commission of Development and Reform, which has the final say on taxi fares.

The commission raised prices of both gasoline and diesel on February 20, setting the cost of 93-octane gasoline at 7.45 yuan per liter. The hike before was last December, where prices jumped from 6.92 yuan to 7.17 yuan per liter.

"I have to pay an extra 500 to 600 yuan a month on gas now, but the fees I have to pay my company are still the same," said a taxi driver surnamed Chen with over 10 years' experience.

"I am obviously under more pressure than before."

Chen told the Global Times that he would earn less than 3,000 yuan per month while still having to pay 3,200 yuan to his taxi company in vehicle rental fees.

"I hope it [minimum fare] could reach 12 to 13 yuan from current 10 yuan," said Chen.

Ji Lin, deputy Mayor of Beijing, revealed during the recently-ended two sessions that authorities have compiled three taxi adjustment strategies: government subsidies, raising base fares and a higher fuel surcharge, qianlong.com reported Thursday.

According to the city's fare adjustment standards, if 93-octane gasoline is priced over 7.1 yuan, fares would increase and the fuel surcharge would be canceled.

The 1 yuan gas surcharge began November 2009 after the price of 93-octane gas went up to 6.66 yuan.

"Increasing the minimum fare is the best solution for us," said Chen.

Considering the price hike passed on to passengers, the report suggests that the "government subsidize low-income groups that take taxis to help ensure their basic standard of living."