The Energy Advisory Committee on Friday said a government proposal to offer fuel subsidies for commercial vehicles and vessels running on diesel first was reasonable as the impact of any rise in their costs could be amplified.

The government is proposing a HK$3 subsidy per litre of diesel for two months as part of a wider support move to help industries affected by the recent surge in fuel prices as a result of the Middle East conflict.

The Legislative Council will vet the proposal starting Friday afternoon.

Speaking on an RTHK radio programme, committee chairman Simon Wong welcomed the move, saying that even though the subsidy would be aimed at the transport sector, other industries including the retail and catering sectors, as well as the public, would also benefit from the initiative, as any extra transportation cost could ultimately be passed on to consumers.

"In this situation, I think it is reasonable to prioritise the transport sector," he said.

"Even the laundry sector would welcome the move, as they also have to transport garments after washing them."

The move, Wong added, also came sooner than the commercial sector had expected, given that the government's surplus was not that big.

As for whether there was a need to impose a cap on fuel prices, Wong said it was not necessary for now as there were only a few oil companies operating in Hong Kong and that any cap would give rise to various problems, including energy security.

The chairman of the Lok Ma Chau China-Hong Kong Freight Association, Stanley Chiang, told the same show he believed the move would alleviate the sector’s burden.

The HK$3 subsidy, he said, would amount to nearly 40 percent of the additional HK$8 cost that the sector has been paying for each litre of diesel since mid-February.

The government has yet to offer details on how the subsidy would be distributed, and Chiang stressed the government should monitor oil companies to prevent them from increasing pump prices at the same time that the subsidy came into effect.

He also said the industry had been looking for a full waiver on tunnel tolls for all commercial vehicles initially, but that the government's proposal to halve the fees instead was acceptable.

Citybus and KMB said in separate statements that the administration's proposed subsidies would offer short-term relief amid a surge in refined oil prices, which had doubled in the past month or so.

However, they said more had to be done in the long term as the high oil prices were unlikely to come down within a short period of time.

The firms will continue to discuss the way forward with the government.



Edited by Tony Sabine