Shanghai authorities have ruled out an immediate rise in taxi fares, but are still seeking ways to ease the burden of escalating fuel costs.

The increase in fuel prices has already triggered fears of a negative impact on the national Consumer Price Index

An Urban Transport Management Bureau spokesman said an inquiry was underway to find out how much effect fuel costs will have on the taxi industry. It was possible taxi fares may rise in the future.

He said the authority will come up with a viable solution.

The city launched a new price-fixing mechanism for the industry last May. The new rule allows the transport authority to adjust fares according to the fluctuation of fuel prices.

When the authority considers the fluctuation will have a significant change in drivers' incomes, it will make fare adjustments.

The starting price, covering a three-kilometer trip in local taxis, was increased from 10 yuan (US$1.30) to 11 yuan. The two-yuan-per-kilometer rate was increased by 0.1 yuan.

"I hope both the fuel price and fare charges will remain stable," said Dazhong taxi driver Zhang Zhiping.

Zhang said two months after taxi fares were increased last May, there was a noticeable drop in business.

He is worried the same will happen if fares increase, but is more concerned about losses in his income because of dearer fuel bills. This view is echoed by other cabbies.

The National Development and Reform Commission raised retail fuel prices by up to 10 percent, effective yesterday, after crude oil surged to record-high levels. It's the first rise since May last year.

In Shanghai, the price at the browser for No. 93 gasoline was raised to 5.19 yuan a liter from 4.76 yuan.

China's CPI rose more than six percent in September and August.

Liu Zhenqiu, deputy chief at the NDRC's price bureau, said the latest rise in fuel prices could lead to a 0.05-percent increase in monthly inflation.

Railway freight rates and civil aviation fuel surcharges and other transport services will need to be adjusted accordingly, the NDRC said.

(Shanghai Daily November 2, 2007)