Hong Kong’s government has announced it will offer diesel and liquefied petroleum gas (LPG) subsidies for public and commercial vehicles amid higher fuel prices due to the ongoing war in the Middle East.
The HK$3 per liter diesel subsidy will last for two months, from 12am on Thursday to 11.59pm on June 29, Chief Financial Officer Paul Chan told reporters on Wednesday.
He said the subsidy, which will benefit public and commercial vehicles, as well as watercraft that use diesel, will be reflected in the price listed at gas stations and the government will reimburse the price difference to oil companies or distributors.
The government proposed the oil subsidy scheme in early April, at an estimated cost of HK$1.8 billion, and the proposal was “rapidly” approved by the legislature, Chan said.
The finance minister also said the LPG subsidy of HK$0.5 per liter for taxis, minibuses and school buses will run for two months. About 16,900 taxis, 3,440 minibuses and 170 school buses in the city will benefit from the measure.
The authorities plan to give the LPG subsidy at the end of May, he said, without saying exactly when.
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Chan said that due to the ongoing conflict in the Middle East, the maximum price for LPG at dedicated fuel stations would increase by over HK$1 per liter – an increase of more than 28 per cent.
“Given that most minibuses and taxis run on LPG, this will put considerable pressure on their operations,” he said in Cantonese.
Transport Minister Mabel Chan told the Legislative Council on Wednesday that the LPG subsidy would cost the government about HK$38.4 million.
She said spending would be “redistributed internally” through three offices: the Financial Services and Treasury Bureau, the Environment and Ecology Bureau and the Transportation and Logistics Bureau.
Tse Chin-wan, the minister of environment and ecology, told media at the legislature on Wednesday that the government will sign contracts with oil companies and conduct audits to prevent abuse of subsidies.
