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Oil price increase sparks mixed reaction
Latest Updated by 2006-03-28 10:30:04
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There has been mixed reaction from taxi companies and drivers to the latest oil price rise, which took effect nationwide on Sunday.

In Guangzhou, some taxi drivers who were severely hit by last year's price increase and gasoline shortage are crying out for compensation from the government.

"The municipal government of Guangzhou allowed us to levy a fuel surcharge of 1 yuan (12 US cents) on passengers for each ride, which enabled us to offset much of the oil price hikes last year. But now the price climbs again!" said cab driver Li Qiangda. 
"The oil price rose consecutively five times during 2005 in Guangdong and now it has happened again," he said. "I really wonder how long I can continue my job."

However, Lai Jiang, a private car owner in Guangzhou, is calm about the new oil price rise.

"I can live with the new rise, which only costs me about 60 yuan (US$7.4) extra a month," Lai said. "Anyway, it's far better than last year's oil shortage."

According to Gao Yiqian, an official with the provincial pricing bureau, the province is hammering out policies to subsidize disadvantaged communities and public service sectors.

In Beijing, retail prices will rise by 460 yuan (US$58) per ton for gasoline and 340 yuan (US$43) per ton for diesel both the highest national price rises compared with an average 250 yuan (US$30.8) and 150 yuan (US$18.5) respectively.

Taxi drivers have called for government subsidies to offset losses.

"I hope and believe the government will subsidize our daily losses caused by the rising fuel cost," said Wang Chunwang, 53, an experienced cab driver of Shunfa Taxi Co.

Driving more than 400 kilometres every day, Wang's 2.0 litre emission Hyundai-Sonata is fuelled by about 32 litres of 93-octane grade petrol, which has risen to 4.65 yuan (58 US cents) a litre from 4.26 yuan (53 US cents).

This leaves Wang short by 13 yuan (US$1.6) a day.

According to local media reports, a taxi price hearing is imminent on the re-adjustment of taxi charges per kilometre .

But officials from the Beijing Municipal Development and Reform Commission told China Daily that a taxi price hearing is not on their immediate working list.

Wang, who has been driving cabs for 13 years, warns that raising the unit price levied on passengers is not the best way to offset the losses because "a rise in prices means a fall in customers."

"I think government subsidy is a better option," he said.

Since last July, Beijing cab drivers have received a monthly 400-yuan (US$50) government subsidy to combat the rise in gasoline prices.

Others are less affected by the price rise. Zou Gang, who manages a local driver-training school and owns about 100 vehicles, said the gasoline price rise stings the profit margin, but the school can still make a profit.

According to an ordinary motorist, the price rise will not have a serious affect on his daily life.

"Office to home commuters like me would not be concerned by the updated gasoline price since we don't drive as much and so are less affected; what's more, we can take a bus or the metro instead," said Wang Haifeng, an IT engineer in his 30s.

Zhang Guifang of the Beijing Bus Group Co told China Daily that bus fares in the city will not be affected by the price rise.

Price rise expected

Meanwhile, Shanghai's taxi companies have responded calmly to the news of the price hike.

"We have been expecting the price rise for some time. Since the government has promised to share relevant costs with us, we can do little but wait," said an officer surnamed Xu with Shanghai Jinjiang Taxi Co Ltd. The State-owned taxi company has a fleet of about 4,000 cars.

The final cost-sharing scheme between the government and taxi companies should be available next month after authorities calculate the forecasted loss from the price rise.

During a meeting of Shanghai municipal government yesterday, officials said the government will take measures to ensure taxi drivers' income in the city will not be affected by the price rise.

Shanghai media outlets have quoted some economists' predictions that more non-State companies will enter the oil retail market in the near future.

Opportunities for savvy entrepreneurs from Shanghai and the delta regions could open up given that the wholesale price has not gone up as much as the retail price.


Editor: Yan

By: Liu Weifeng , Zhou Weirong and Zhan Lisheng Source: China Daily Website
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