MTR fares will rise by 2.3 percent this year – the first increase since 2019 – based on an updated fare adjustment mechanism.

The railway giant said that means most rides will cost an additional HK$0.4 or less.

Last week, the Executive Council approved the revamped mechanism used to set MTR prices, which now includes the corporation's property development profits, as well as the inflation rate and a wage index in the transport sector.

Inflation rose by 2 percent year-on-year in December last year, and government data released on Tuesday showed wages increased by 3.6 percent in the same period.

"The newly reviewed [fare adjustment mechanism] and special arrangement have lowered the fare adjustment rate and as a result around 90 percent of fares are expected to have an upward adjustment of 40 cents or less this year, suitably balancing the public's affordability and the corporation's ability to continue to provide high quality, reliable and efficient railway services to Hong Kong passengers,” the MTR said in a statement on Tuesday.

The corporation said it will work out the actual changes and complete all required administrative procedures before announcing when the new fares will take effect.

Aaron Kei, a member of the MTR Fare Structure Concern Group, described the increase as fair, but he also said the mechanism should reflect the corporation's profits from all activities, not just property development.

"They're just 0.2 [percentage points lower] when compared to the previous adjustment mechanism. It does lower the adjusted rate, but it is not obvious," Kei said.

Roundtable lawmaker Michael Tien said he is "extremely unhappy" that the new fare adjustment formula takes into account only property profits, and not areas such as recurring rents and advertising.

The former KCR chairman said this means profits have a "miniscule" impact on fares.

But he also said commuters could have been charged more.

"They could have had an increase of 2.84 [percent], instead they deferred about 0.5 [percentage points] of that to the future," he said. "But don't forget, it's not a write-off. They're just deferring it to minimise the impact on their passengers."

DAB legislator Ben Chan also voiced his disappointment, saying that the MTR still raised fares after earning billions of dollars.

"We suggest the MTR to provide more discount, provide some special rewards to passengers," Chan said.