In response to conflicts in the Middle East region, Chief Executive John Lee today chaired a special meeting of the Inter-departmental Task Force on Monitoring Fuel Supply, during which four measures for addressing rising fuel prices were accepted.
(1) Subsidising diesel prices
The task force proposed a two-month subsidy of $3 per litre of diesel to support public and commercial vehicles and vessels and related industries that use diesel as fuel, with a view to reducing their operating costs and alleviating their pressure to raise prices. This subsidy is estimated to cost approximately $1.8 billion. The Environment & Ecology Bureau (EEB) will work with the Competition Commission to monitor the pricing practices of each fuel company to ensure that they do not take advantage of the occasion.
Meanwhile, the majority of taxis and public light buses use liquefied petroleum gas as fuel, the price of which currently remains stable. The task force will continue to monitor price movements and consider the matter further where appropriate.
(2) Tunnel toll reduction for non-private cars
The task force proposed that the Government reduces tunnel tolls by 50% for all commercial vehicles (including goods vehicles, buses, minibuses and taxis) using government-operated toll tunnels, excluding private cars and motorcycles. The measure will last for two months and is expected to result in a revenue reduction of about $160 million.
(3) Establishing Working Group on Public Transport Service Special Applications
The task force recommended establishing a Working Group on Public Transport Service Special Applications under the task force’s purview. The working group will be chaired by the Secretary for Transport & Logistics, with the Secretary for Environment & Ecology as deputy chair, and the Commissioner for Transport and the Government Economist as members.
Taking into account the overall operating environment, public transport service operators’ costs, and public affordability, while maintaining the stability and normal operations of public transport services, the working group will assist in expediting the approval of applications submitted by the operators in response to rising fuel costs. This includes considering ways to enhance operational efficiency through service integration and introducing energy-saving measures.
(4) Adjusting measures based on actual circumstances
As the impact of the situation in the Middle East on Hong Kong’s economy largely depends on whether the military conflict continues, expands, or escalates, the task force will continue to conduct dynamic assessments, co-ordinate bureaus and departments to prepare contingency plans, and formulate forward-looking strategies. It will also study different measures to alleviate the impact of rising oil prices.
Accepting the recommendations, the Chief Executive instructed the task force to implement the measures as soon as possible, while continuing to monitor developments and the latest situation.
The aforesaid subsidy measure requires funding approval by the Legislative Council Finance Committee. The Government will liaise with LegCo with a view to scheduling a meeting as soon as possible, so as to facilitate the early implementation of the measure.
The task force also recommended that the Government, in formulating support measures, shall have regard to a number of principles.
It noted that priority should be given to the operational sectors that are most severely affected and those sectors that involve public services. Public transport services (including franchised and non-franchised buses, minibuses and ferries) as well as school buses and residential buses, whose operating costs are highly susceptible to fluctuations in diesel prices, should be regarded as priority sectors. Meanwhile, the use of private vehicles for self-use, being a matter of personal decision with alternative options available, shall not be considered a primary priority.
It also stressed that given the unpredictability of the military conflicts, any support measures shall be temporary and short-term in nature, so as to avoid creating risks to public finances.
During today’s meeting, Acting Financial Secretary Michael Wong briefed the Chief Executive on the local fuel supply situation and the trend movements of international energy prices, as well as the measures already taken by the Government.
Around 80% of Hong Kong’s oil products come from the Chinese Mainland. The Hong Kong Special Administrative Region Government has been in close communication with the central government and various Mainland authorities to ensure that Hong Kong’s energy supply remains stable with the country’s support.
In addition, major local auto-fuel suppliers indicated that the auto-fuel supply in Hong Kong is currently normal and that they will continue to strive to maintain a stable supply.
Starting April 1, the EEB has been releasing, on a weekly basis, the trend movements of the seven-day moving average retail prices, after walk-in discounts, of unleaded petrol and diesel from local oil companies, together with the trends in international benchmark prices of refined oil products for the same period, to enhance the transparency of market and price.
