Travelers who come to Beijing for the first time often find the subway and buses in this metropolis are at some kind of stone age in terms of prices. The subway fare is set at two yuan ($0.33) regardless of mileage and the bus ticket price for transit card holders is only 0.4 yuan for most routes (one yuan for non-card holders). However, the news that Beijing is mulling a public transportation fare hike has triggered hot discussions among the public. Some insiders have revealed that the subway fare may soon start from three yuan and increase based on mileage, in the manner many other cities charge.

Some complain that one of the rare privileges of Beijing residents may soon be taken away. Experts are also divided.

Beijing residents have been enjoying these low prices for almost six years. The city had invested in public transportation before the 2008 Olympic Games so as to promote public transport and avoid traffic headaches. The policy has continued since then as the city witnessed a growing population over the following years.

However, these low-price incentives have generated a huge financial burden for the Beijing government. As costs in many fields such as petrol and maintenance are rising, more investment is needed to broaden the range of public transport services and to improve service quality. The total subsidy for public transport in 2012 stood at 17 billion yuan ($2.77 billion), 2 billion more than that of 2011, according to Beijing's finance bureau.

The public always objects when prices of services are raised, and says that subsidizing these products is supposed to be the government's obligation.

In June, Shanghai announced it would increase water rates by around 30 percent. Though the authorities explained that this was not a price adjustment meant to make money but to encourage water conservation, the policy still drew criticism from the public.

At the same time, the public often calls for better public services, which sometimes are only supported by a rise in prices. This is the dilemma many public products face as they linger between government subsidies and privatization.

Raising the prices of public products should keep one key premise in mind - resource allocation should ultimately benefit the largest possible number of people. For low-income people who have a stronger basis for objections toward the rising prices, the government may consider offering them allowances.

Public products, such as Beijing's public transport, have two distinct sides. They have to take the public interest into consideration and offer good services, but there is also the impetus to make a profit. It is difficult to achieve both at the same time.

The basic requirement is that public products should find a balance between the public interest and market benefit.