Taxi passengers will have an extra 1 yuan added to their fares within days after the city's fuel price hit its highest level in years.

Under a new municipal government policy, passengers will pay an extra 1 yuan for each trip they make as a fuel surcharge.

Passengers with a 10 yuan fare - the smallest journey possible - will not have to pay the surcharge.

It follows a price increase for gasoline. The city's 66,000 cab drivers currently pay 6.66 yuan for each liter of fuel.

The policy stipulates that the price of taxi fares could rise further if gasoline prices rise above 7.1 yuan.

The last change in taxi fares was in 2006, when it was increased to 2.4 yuan per km.

The government refused to reveal when the new pricing system would take effect, but FM103.9 Beijing Communications Radio quoted anonymous sources as saying the policy would come into force "in the next few days".

Locals told METRO they are not concerned about the 1 yuan surcharge, but they worry that taxi fares will continue to soar in the coming months.

"The 1 yuan surcharge per trip seems okay," said Fofo Hu, an employee of a Korean firm who often takes taxi to her office near Zhongguancun.

"But if the fares per km rise, I will go crazy," she said.

Experts, who helped set the current taxi pricing system in 2006, said the increase is necessary.

"Exorbitant fuel prices and a bad economic environment have made it necessary for everybody to share the cabbies' burden," said Hu Anchao, a Beijing-based lawyer who helped decide the taxi fares at the last public hearing in 2006.

Zheng Xiang, an associate professor on transportation policy with Beijing Jiaotong University, said: "We agreed on a mechanism in the last public hearing to leave room for more increase."

"But the increase should come after fuel prices rise too high and taxi operation companies prove the economic pressure is holding them up."

China's retail gasoline and diesel prices have increased by 6 percent since Tuesday, bringing the price for 93-ron gasoline, used by most Beijing taxis to 6.66 yuan per liter. The 0# diesel also increased by 6.6 yuan per liter and jet fuel prices also rose by around 300 yuan per ton.

Shenzhen and Shenyang recently tabled similar proposals to increase stipends for taxi drivers. Currently, Beijing municipal government and taxi companies offer each taxi driver a stipend package of 1,305 yuan per month to help pay for their fuel costs.

"This is the best news for me so far this year," Fu Chengzhi, a 44-year-old taxi driver, told METRO. "The stipend is much more than I expected."

The taxi driver, who drives between 20 and 30 trips per day, said the stipends will give him an extra income of up to 1,000 yuan, adding an extra 25 percent to his monthly income.