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The following is a statement by the Secretary for Economic Services, Ms Sandra Lee, today (November 6) in response to concerns from the transport industry on oil prices.

Friends from the media,

Recently, there have been concerns about oil prices, especially the retail price and concessionary duty for ultra low sulphur diesel (ULSD).

Government is aware of the business situation and the operating environment of the transport industry. We also fully understand their concerns regarding increase in world oil prices.

I would like to explain Government's position in respect of the retail price and concessionary duty for ULSD.

First, on whether the relevant oil companies have passed the full benefit of the concessionary duty ($0.89 per litre) to consumers, the Economic Services Bureau has requested oil companies to account to the public with convincing data. Oil companies have provided information to the LegCo Economic Services Panel last Saturday. I would like to reiterate to oil companies that as some of them have previously indicated there is room for reducing the retail price of ULSD, they should reduce the price immediately.

At the same time, we will actively explore different options to expedite the introduction of competition into the fuel market. For example, the recent arrangement for dedicated liquefied petroleum gas (LPG) filling stations may be a case for reference.

Secondly, regarding concessionary duty for ULSD, Government will decide in December this year whether the existing concessionary duty for ULSD should be adjusted. Before making any such decision, Government would consider all relevant factors, including the movement of oil prices, the operation of the transport trade, and Government's overall financial position.

Lastly, I would like to make an appeal to the transport industry. Government understands their concerns regarding oil prices. We hope that in staging their actions tomorrow, they would keep calm, take into account public interest and would not cause disruptions to the daily life of the public or to traffic.

End/Monday, November 6, 2000

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