After months of discussion and planning, Beijing is finally set to raise taxi fares from 1.6 yuan (20 US cents) to 2 yuan (25 US cents) per kilometer from May 20, 2006.

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]

Charges for base mileage, returning empty, night service, waiting and low-speed driving will remain unchanged.

A system linking taxi fares and oil prices will be established to spread increase burden between taxi companies, taxi drivers and passengers. When oil prices go up, taxi companies and drivers will absorb it and it fare increases will trickle down to passengers.

Against a backdrop of surging oil prices worldwide, price adjustments for oil products have been under way nationwide since the end of March this year. The Beijing Municipal Development and Reform Commission held a hearing conference at the end of April and most of the delegates present supported a rise taxi fares.

Commission sources say the valuating device and the price labels on Beijing's taxies would have been changed into new ones by the end of June and all of the taxies in Beijing will be charged 2 yuan per kilometer from July 1st, 2006.