HK Electric has said it will raise the fuel surcharge by 33.9 percent in July due to what it called the “push-through effect” of the US-Israeli war with Iran.
HK Electric, one of the city’s two main electricity utilities, said on Thursday that the Fuel Clause Charge (FCC) will be set at 41.9 cents per unit of electricity from July.
That represents a 33.9 percent increase from June, when the surcharge — which is set to reflect energy costs — was 31.3 cents.
See also: Middle East war: Cathay Pacific to cut fuel surcharges next Wednesday as oil prices fall
“Due to the ‘push-through effect’, the current level has not yet fully reflected changes in fuel costs,” HK Electric said in a STATEMENT. “With the situation in the Middle East remaining uncertain, the FCC is expected to continue to increase in the coming months,” he added.
The city’s other utility giant, CLP Power, has yet to announce fuel cost surcharges for July. Currently, CLP Power charges 42.6 cents per kilowatt hour of electricity, from 40.4 cents in May.
Fuel surcharges imposed by Hong Kong’s two electricity companies are calculated monthly and adjusted according to the average fuel costs of the previous three months.
“In other words, the FCC for July is determined based on the average fuel costs of March, April and May this year, at a time when global oil and natural gas prices rose sharply amid the conflict in the Middle East,” HK Electric said.
The peak is expected in August
The US and Israel jointly struck Iran in late February, with the Islamic republic launching retaliatory strikes across the Gulf. The war closed the Strait of Hormuz, a crucial waterway for global oil supply chains.
Between the start of the war and early June, US President Donald Trump has claimed that a deal to end the conflict was imminent at least 38 times, according to CNN.
However, an interim agreement has been signed by Washington and Tehran to reopen the strait and extend the current ceasefire by 60 days.
Simon Wong, chairman of the Hong Kong government’s Energy Advisory Committee, said last month that the city’s electricity bills would reached a short-term peak in Augustafter which prices may fluctuate to a high level.
Total electricity costs for residents will be five to 10 percent higher than before the conflict, Wong said.
