Shanghai's inflation grew faster in May as fuel costs rose and food prices continue to increase.

The city's Consumer Price Index rose 1.5 percent year on year last month, after adding 0.8 percent in April, the Shanghai Statistics Bureau said yesterday. The combined growth in the first five months of this year was 1.1 percent.

Food costs, making up one third of the index, added 2 percent year on year in May, after increasing 1.4 percent a month earlier.

The cost of oil in the city rose again last month after the National Development and Reform Commission raised fuel prices for the second time this year. Petrol pump prices in Shanghai jumped 16.5 percent in May from a year earlier and diesel retail prices grew 18.2 percent year on year.

"The rising fuel costs led to higher service prices as the city allowed taxi drivers to pass on some of the higher costs to consumers," said Liu Hui, a statistician at the bureau.

As a result, taxi charges in Shanghai increased 5.2 percent.

Meanwhile, the city's fixed-asset investment in the first five months expanded 8.6 percent from a year earlier as the government boosted metro line construction in preparation for the World Expo in 2010. But the growth in FAI was 0.3 percentage point smaller than that of the first four months as property spending declined for the first time.

Investments reached 137.9 billion yuan (US$17.2 billion) in January to May, the bureau said.

Spending in infrastructure construction reached 35.1 percent in the first five months, up 13.1 percent from a year earlier, due to increased moves to add several metro lines to the city's network.

A total of nine metro lines will be in service for visitors to the 2010 World Expo and commuters to other parts of Shanghai, city government officials said in April.

Real estate investment shed 0.2 percent in the first five months from a year earlier as government efforts to cool the property market took hold.

The bureau also said that Shanghai's retail sales in May climbed 13.6 percent from a year earlier to 28.3 billion yuan, as the Labor Day holiday spurred consumption.

(Shanghai Daily June 20, 2006)