The power firm, which supplies electricity to Hong Kong Island and Lamma Island, earlier announced its fuel surcharges for July would jump to 41.9 Hong Kong cents per unit of electricity, up 34 percent from June’s rates.
Speaking on a radio programme on Sunday, HK Electric’s managing director Francis Cheng pointed out that gas-fired power generation accounts for about 70 percent of its fuel mix, saying the disruption in natural gas supplies has kept rates high.
“Our supply of natural gas is very dependent on liquefied natural gas. We have two major suppliers for liquefied natural gas: one is Qatar in the Middle East, and the other is Australia,” he said.
“Since there’s no more natural gas from the Middle East, so we have to get it from the spot market. The price in the spot market is much higher than that of long-term contracts.”
Cheng admitted the firm is essentially transferring all the extra fuel costs onto its customers, but stressed the utility does not gain any financial benefit from the surcharge and has also offered relief measures.
HK Electric is giving a special subsidy to residential customers whose monthly power use amounts to 450 kilowatt-hours or less between August and October.
The move is expected to benefit half of its customers, according to the company.
Cheng also noted that its Qatari supplier might be able to allocate some alternative natural gas resources from elsewhere to supply Hong Kong starting from mid-July onwards.
However, he stopped short of predicting when fuel surcharges could start coming down, citing the ongoing uncertainty in the Middle East.
