Beijing's first taxi fare hike in six years starts on Saturday, raising the price per kilometre after the four-kilometre base from 1.6 yuan (20 US cents) to 2 yuan (25 US cents).

The base rate will remain 10 yuan (US$1.25).

Two taxis get refuel at a gas station in Beijing April 26, 2006. Beijing is set to raise taxi fares from 1.6 yuan (20 US cents) to 2 yuan (25 US cents) per kilometre after a fuel price hike. [Xinhua]

The process will last until June 30 during which taxi companies will change fare devices and price labels and taxis that show the 1.6-yuan fare window tag will continue to run under the old system.

The 2-yuan fare conversion will be completed on June 30.

The 3,000 smaller taxis that charge 1.2 yuan (15 US cents) per extra kilometre will be phased out by the end of this year.

Beijing Municipal Commission of Development and Reform announced the hike on Friday after a public hearing last month.

The fare rise aims to offset the impact of up-to-50 per cent increases in fuel prices since 2000.

Sources with the commission said the hike was in line with the decision of the central government to urge local governments to come up with solutions to ease the impact caused by the rise in oil prices worldwide.

"The principle is that taxi companies, drivers and passengers should share the impact," the commission said.

Official statistics indicate the fare adjustments will affect about 63,600 taxis in the city.

Taxi fares in Beijing have remained unchanged since 2000, but oil prices have increased from 3.2 yuan (40 US cents) a litre in late 2000 to the existing 4.65 yuan (57 US cents).

During the previous oil hike, taxi companies and the government have been subsidizing drivers since 2000 to reduce the impact of higher oil costs. The subsidies range from 500 yuan (US$63) to 670 yuan (US$84) a month.

After the new fare system is in place, the subsidies will be lowered as drivers are expected to benefit from higher incomes.

But taxi drivers are worried that the fare rise may push more passengers into illegal taxis, whose number is estimated at 70,000.

The government has urged the taxi companies to protect the rights and interests of taxi drivers and bring them under the umbrella of social security. The companies should not ask the drivers to shoulder the cost of changing the meters.

Shanghai raised its taxi fare earlier this month. The base price downtown is now 11 yuan (US$1.38) for the first 3 kilometres, up from 10 yuan (US$1.25), during most of the day. After 11 pm, the base fare is 14 yuan (US$1.75), up from 13 yuan (US$1.63). Charges for each additional kilometre edged up to 2.1 yuan (26 US cent) from the previous 2 yuan (25 US cents).