Singapore's largest taxi firm hikes fares

SINGAPORE Dec 6 (Reuters) - Singapore's largest taxi operator ComfortDelGro announced an increase in its basic taxi fares, in a move that could push up inflation in the city-state that is currently running around two-year highs.

ComfortDelGro, the dominant player in an industry which also has around half-a-dozen other competitors, including SMRT Corp , said the move was part of an overall fare structure revision and cited increasing demand for transport services in the city-state.

The flagdown fares will go up between 20-70 Singapore cents while the fares on per meter basis will go up by as much as nearly 6 percent, according to Reuters calculations.

"Strong population growth and an increase in tourist arrivals have resulted in a significant spike in demand for taxi services throughout the day - even during traditionally 'off-peak' hours," the company said in a statement late on Monday.

ComfortDelGro said the new fare structure will come into effect from December 12. It will be its first fare revision since 2007.

Song Seng Wun, regional economist at CIMB Research, said the fare increase would be inflationary although the full impact will be felt early next.

A trader in Singapore said other taxi operators may follow ComfortDelGro's move.

Transportation carries a weighting of 16 percent of Singapore's overall inflation. In October the transport component of Singapore's consumer price index went up by 10.5 percent year-on-year, faster than the 5.4 percent rise in the overall index.

Singapore's year-on-year inflation remains high by historical standards but is probably easing amid a slowing economy. Its central bank expects inflation of 2.5 to 3.5 percent next year, down from around 5 percent this year. (Reporting by Harry Suhartono; Editing by Muralikumar Anantharaman)