Bus operators said a sharp rise in fuel costs has created a huge financial burden and other revenue streams were also falling, as the four firms seek fare increases with Citybus applying for the highest rise of 17.7 per cent.

Appearing before the Legislative Council's transport panel on Friday, representatives from the bus operators said fuel prices had risen sharply, causing significant financial pressure.

"We're incurring approximately an additional HK$60 million a month in fuel compared to what we were at the beginning of this year. And for Long Win Bus Company it's approximately HK$6 million extra each month which is overall more than double what we were paying last year," Martin Cadman, operations director of the Kowloon Motor Bus, told lawmakers.

"Post-war oil prices... just an increase of one or two dollars a litre can succeed in eliminating all of our modest profits which is quite something. It shows how sensitive we are to such events," Mark Savelli, operations director of New Lantao Bus said. He noted that the worst he saw was a rise of US$7 per litre.

Bus company representatives also cited other factors, including changing travel patterns leading to falling revenue. They stressed that they had already made efforts to boost non-fare income.

Citybus Managing Director William Chung said the opening of MTR's South Island Line and the Sha Tin to Central Link had taken away many bus passengers. He said the company returned to profitability after its last fare increase, but was still under severe pressure from rising oil prices.

Deputy Secretary for Transport and Logistics Kirk Ip said the government would handle the fare applications with prudence, taking into account factors including public acceptability and operators' financial sustainability.

"We will not accept bus companies' applications outright; we will carefully review various factors and also consider the overall affordability for the public," he told lawmakers.

A final proposal would be submitted to the Chief Executive and the Executive Council after consulting the Transport Advisory Board.

Several lawmakers criticised the scale of the proposed increases, which they said exceeded the rate of inflation and pay rises for employees.

New Territories West lawmaker Scott Leung described the hikes as "jaw-dropping" and asked whether the government would subsidise fuel costs. Transport sector lawmaker Lothair Lam suggested adopting a fare adjustment mechanism similar to the MTR's annual review formula for bus fares.

In response, Ip said different public transport modes and bus companies operate under different franchises and service areas, making a simple formula unsuitable. He acknowledged that oil prices are a significant component of operating costs, and said there is a standing mechanism to review their financial and service impact.


Edited by Aaron Tam