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Government response to requests by LPG taxi drivers

In response to the request by some members of the liquefied petroleum gas (LPG) taxi drivers to introduce a fuel surcharge and views on the price adjustment mechanism of dedicated LPG stations, a Government spokesman said today (March 6) that we did not think the community would support the fuel surcharge proposal.

ˇ§The taxi trade does not have any consensus on the fuel surcharge as some operators fear it might undermine the tradeˇ¦s competitiveness,ˇ¨ he said.

On the price adjustment mechanism of dedicated LPG filling stations, the spokesman noted that latest information had shown that the international LPG prices had dropped. It was expected that the ceiling price of LPG at the dedicated LPG filling stations for the month of April would drop by about 40 cents, reflecting the change of international LPG prices in March.    

He said that the new price adjustment mechanism would work to the benefit of the trade as the LPG prices at dedicated filling stations would have to come down immediately on April 1 in line with the decline in international LPG prices.

Under the new mechanism, the operators of dedicated LPG filling stations have to adjust LPG ceiling price according to the movement of LPG international price. It is not possible, therefore, for companies to increase prices quickly and lower prices slowly.

The spokesman said the queuing time at dedicated LPG filling stations had been substantially reduced since the new mechanism took effect in March this year.

The Electrical and Mechanical Services Department announced on February 25 the adjusted automobile LPG ceiling price at dedicated stations for the period between March 1 and 31, 2006. This was the first adjustment under the monthly adjustment mechanism introduced on February 1 (reflecting the changes in international LPG prices in February 2006).
After adjustment, the LPG ceiling price at dedicated filling stations was increased by 64 cents a litre.

The spokesman said the operators of dedicated LPG stations, after taking into consideration market competition and aspirations of the community had set the LPG prices at most of the dedicated LPG stations at a level lower than the ceiling price.

ˇ§We call on the transport trade to continue the dialogue through established channels and not to take any drastic action that would cause inconvenience to the public,ˇ¨ he said.

ˇ§Since the introduction of automobile LPG in 2000, the transport trades are paying less for fuel. Prices of LPG per litre at dedicated LPG filling stations, for example, are still 45% lower than the equivalent diesel price,ˇ¨ he added.

Ends/Monday, March 6, 2006
Issued at HKT 19:55