The Shanghai government has decided to subsidize taxis on a temporary basis in a bid to counteract surging oil prices in the country. 

Each taxi will receive 200 yuan(US$25) a month starting August 1.

Shanghai oil prices have gone up a further six percent in late July due to rising international oil prices.

Taxis are an important part of the municipal transport system. Nearly 100,000 drivers in Shanghai drive 43,000 taxis, taking almost three million passengers a day, which accounts for one quarter of the city's total.

At a meeting held on Monday, Shanghai officials discussed the effect of rising international oil prices on the city's transportation and the possible establishment of a long-term mechanism about changing oil prices to better serve the public transportation system.

(Shanghai Morning News August 2, 2005)