Peter Wong, the managing director of Hong Kong’s sole gas provider, told a press conference that the prices of naphtha, which accounts for about 40 percent of the raw materials for producing gas, has doubled since the start of the year.
“We are currently under pressure to raise charges and we’re in close communication with the government over the extent of the price increase. It’s also because of the rise in energy prices and inflation,” he said.
“As to when a decision will be made, It’s up to the government. But if we look back to two years ago, our previous price increase was implemented on August 1,” he added.
Wong, however, did not give a timeline on when the prices would go up.
He noted that the firm has so far saved more than HK$20 billion on fuel costs for local customers because of its long-term “take or pay” contract with a supplier in Australia to secure natural gas.
Under their 25-year agreement, signed in 2006, the Australian firm would supply natural gas to Towngas for fixed prices during the period.
Towngas has also started negotiations with the Australian supplier over the new prices of their contract as the current one is set to expire in 2031, but “it’s difficult to assess the new pricing”, Wong said.
Separately, he forecast that the city’s total gas consumption would decline by three percent year-on-year in the first half of the year, partly because of the high temperatures that has reduced residential demand.
But he added that the decline is likely to be smaller for the full year, pointing to a recent increase in gas consumption in the hotel and catering sectors.
Meanwhile, Wong expressed optimism over the Northern Metropolis development, noting the company is laying pipelines to meet the demand of the expected additional 1.5 million residents and commercial users there.
