Hongkong Electric on Friday said its fuel-clause charge would come down in May but confirmed it would rise "significantly from mid-year" following a sharp surge in international oil and natural-gas prices resulting from heightened tensions in the Middle East since March.

The charge for May will be 26 HK cents per unit of electricity, representing a further decrease of 4.4 cents compared with April, which the utility said is mainly attributable to the “deferred effect" under a monthly adjustment mechanism that calculates the charge based on average actual fuel costs incurred in the first three months.

Customers, it said, received a "certain buffer" in the relatively lower fuel costs recorded in the first two months, along with adjustments to the fuel mix and fuel-supply arrangements made in response to the Middle East’s situation, even though fuel prices had risen sharply since March.

The charge would rise significantly in mid-year, it said, as a result of the "unavoidable" impact of the sharp and substantial rise in fuel costs following the outbreak of the Middle East conflict.

A spokesperson stressed the power giant recovers "only the actual fuel costs incurred without making any profit from the increased fuel-clause charge", which is determined under a transparent “pass-through” mechanism.

Hongkong Electric said it would continue to closely monitor developments in the energy market and fuel supply and will prudently manage fuel inventory, generation operations and statutory emission requirements to ensure a stable and reliable electricity supply.



Edited by Tony Sabine