LCQ13: Measures to cope with rising fuel prices
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Question:
Given that the situation in the Middle East remains tense, international oil prices continue to stay at high levels. There are views that the persistently high oil prices in Hong Kong have imposed heavy pressure on the transport logistics industry, the transport and related sectors, as well as on the livelihood of the community. In this connection, will the Government inform this Council:
(1) given that the National Development and Reform Commission and governments of other countries have respectively introduced measures in response to international oil prices in recent months, and that the impact of the tensions in the Middle East on fuel supply and prices is not short-term in nature, whether the authorities will, in light of the circumstances, review and plan the next-phase support measures for the transport industry as well as oil price control measures;
(2) as there are views that there has been insufficient transparency in the operating costs and sales data of oil companies in Hong Kong, making it difficult for the market to be effectively monitored, whether the authorities will, in the long run, step up their review of the development of the local fuel market and establish an oil price regulation mechanism that can be activated in a timely manner as a standing measure to stabilise the level of oil prices in Hong Kong;
(3) whether it will further empower relevant departments or organisations to strengthen the monitoring of the reasonableness and necessity of oil price changes, enhance the transparency of oil price adjustments and ensure fair market competition; and
(4) as there are views that, in order to cope with the persistently high oil prices, the Government should, in the long run, further encourage members of the public to save energy; whether the authorities will introduce specific measures to promote energy-saving habits in the community; if so, of the details?
Reply:
President,
The Government is very concerned about the rising fuel prices due to the tense situation in the Middle East. The fuel supply and prices affect daily lives of the public, including public transportation, air transport, electricity, and oil prices, as well as having an impact on freight costs, thereby indirectly affecting future livelihood needs. The Government's work primarily focuses on several aspects. First, to ensure stable energy supply. Second, to enhance the transparency of information regarding changes in fuel prices. Third, the Government monitors price changes, carefully considers their reasonableness and necessity, and also reminds suppliers of their social responsibilities.
Currently, around 80 per cent of Hong Kong's oil products come from the Chinese Mainland. With the advantage of having strong support from the motherland, Hong Kong has been able to maintain a stable energy supply amid the emergence of energy shortages in many regions and cities around the world. The Environment and Ecology Bureau (EEB) is in contact with local auto-fuel suppliers to ensure that the supply of auto-fuel remains stable.
In consultation with the Transport and Logistics Bureau and the Commerce and Economic Development Bureau, the reply to the question raised by the Hon Adrian Ho is as follows:
(1) in view of the outbreak of the conflict in the Middle East region, the Chief Executive has earlier directed the establishment of the Inter-departmental Task Force on Monitoring Fuel Supply (the Task Force) to monitor and assess geopolitical changes, fuel supply and prices, to ensure the stability of Hong Kong's energy supply, and to examine the impact of oil price fluctuations on various industries. The Task Force recommended that in formulating support measures, the Government shall have regard to the following principles:
(i) given that fluctuations in crude oil prices have a broad impact across society and considering the Government's fiscal constraints, priority should be given to the operational sectors that are most severely affected and that involve public services;
(ii) if the service prices of the operational sectors are subject to regulatory approvals by the Government, these matters shall be addressed through the existing approval mechanism;
(iii) the use of private vehicles for self-use shall not be considered a primary priority since this is a matter of personal decision with alternative options available;
(iv) given the unpredictability of the military conflict and the ongoing ceasefire negotiations, any support measures shall be temporary and short-term in nature, so as to avoid creating risks to public finances; and
(v) it is considered that public transport services as well as school buses and residential buses, whose operating costs are highly susceptible to fluctuations in oil prices, should be regarded as priority sectors for consideration of support.
Based on the above principles, the Task Force has introduced the following measures to address the fuel prices:
First, the two-month Diesel Subsidy Scheme (the Subsidy Scheme) is effective from April 30 to June 29 of this year to support public and commercial vehicles and vessels and related industries that use diesel as fuel. Under the Subsidy Scheme, users who consume diesel locally may receive a subsidy of HK$3 per litre when they purchase diesel, thereby making the selling price of diesel decrease by HK$3 per litre.
Second, the Government will reduce tunnel tolls by 50 per cent for all commercial vehicles (including goods vehicles, buses, minibuses, and taxis) using government-operated toll tunnels, excluding private cars and motorcycles. The measure will last for two months and is expected to result in a revenue reduction of approximately HK$160 million. The Government will work with toll service providers to adjust the toll collection systems in order to implement the reduction as soon as possible.
Third, the Working Group on Public Transport Service Special Applications (the Working Group) is established to assist public transport operators (including public buses and ferries) in their applications relating to responding flexibly to rising fuel costs. The Working Group convened its first meeting on April 16 to listen to the franchised bus operators on their current business environment and operation situation, as well as measures they have taken to address the rising fuel costs. The Working Group will consider targeted temporary measures to help operators save energy and enhance operational efficiency in response to oil price fluctuations.
Fourth, to alleviate the operating costs of local passenger transport commercial vehicles which primarily use liquified petroleum gas (LPG) as fuel (namely taxis, public light buses and school private light buses (commonly known as nanny vans)), and reduce the pressure for fare increases, the Government will provide a fuel subsidy of HK$0.5 per litre of LPG for taxis, public light buses and school private light buses for a period of two months. The fuel subsidy is expected to be launched within May, with the exact commencement date to be announced separately.
The Task Force will continue to conduct dynamic assessments, co-ordinate bureaux and departments to prepare contingency plans, and formulate forward-looking strategies. The Task Force will also study different measures to alleviate the impact of rising oil prices.
(2) and (3) For many years, retail prices of auto-fuels in Hong Kong have been determined by the market and depend on a host of factors, such as the costs of purchasing imported refined oil products and operating petrol filling stations (PFSs). The Government has been endeavouring to ensure a stable and reliable fuel supply, maintain an open market and encourage competition, and at the same time enhancing transparency of the prices of auto-fuel products so that consumers can make suitable choices.
Although retail prices of auto-fuel in Hong Kong are determined by oil companies having regard to market principles and operating costs, the Government is mindful of the concerns across various sectors regarding auto-fuel prices in Hong Kong and has been monitoring whether changes in local retail prices of auto-fuel are in line with the trend movements of international refined oil product price, and in contact with oil companies and urged them to promptly adjust prices in tandem with international refined oil product price movements.
To enhance price transparency, the Government commissioned the Consumer Council in November 2020 to launch the Oil Price Watch website and mobile application, which provide information on pump prices and discounted prices, PFS search function, and push notifications on price changes, enabling consumers to access comprehensive pricing and promotional information more conveniently. As of March this year, the Oil Price Watch mobile application had a total of 123 000 downloads and an average of 157 000 monthly visits, while the website recorded an average of 262 000 monthly visits.
To facilitate the public monitoring of retail price adjustments for auto-fuel, with effect from April 1, 2026, the EEB releases, on a weekly basis, the seven-day moving average retail prices, after walk-in discounts, of unleaded petrol and diesel from oil companies, along with the trends in international benchmark prices of refined oil products during the same period, to enhance transparency of market and price. The Competition Commission (CompComm) has also met with oil companies, emphasising the importance of fair competition and information transparency. The CompComm will continue to closely monitor the market for any instances of price fixing or unfair competition to ensure fair market operations.
In addition, the Government will continue to work with the Consumer Council to optimise the Oil Price Watch website and mobile application, to facilitate consumers to make informed choices that are suitable to their needs.
(4) Buildings account for about 90 per cent of Hong Kong's total electricity consumption. To this end, the Hong Kong's Climate Action Plan 2050 has set energy-saving targets for commercial and residential buildings, striving to gradually reduce electricity consumption of new and existing commercial buildings by 30 per cent to 40 per cent and that of residential buildings by 20 per cent to 30 per cent by 2050, and to achieve half of these targets by 2035, using the operational conditions of 2015 as the comparison basis.
To promote energy conservation in buildings across Hong Kong and encourage the public to conserve energy, the amended Buildings Energy Efficiency Ordinance (Cap. 610) (BEEO) will be fully implemented from September 20, 2026, with a view to extending the scope of energy efficiency regulation to more types of buildings, shortening the intervals of energy audits, and disclosing technical information in energy audit reports. Upon full implementation of the above amendments, it is estimated that an additional 500 million kilowatt-hours of electricity, equivalent to the annual electricity consumption of about 150 000 three-person households, could be saved by 2035. In addition, the Government has been implementing the Mandatory Energy Efficiency Labelling Scheme (MEELS) to regulate the energy efficiency of household appliances and gas products. The total energy consumption in the residential sector covered by the MEELS has substantially increased from about 50 per cent in 2024 to about 80 per cent at present; and the upgrading of energy efficiency standards of refrigerating appliances, washing machines and storage type electric water heaters has been fully implemented on September 30, 2025. Compared with 2015, the MEELS can save about 1.1 billion kWh of electricity per year, which is equivalent to the annual electricity consumption of about 330 000 three-person households.
The Government will continue to review the regulatory scope of the BEEO, review the coverage and applicable standards of the MEELS at appropriate juncture, and promote practical information and best practices related to energy conservation and carbon reduction to the public continuously through outreach activities, thematic webpages, and posts on social media platforms, with a view to continuously promoting energy conservation in Hong Kong.
Ends/Wednesday, May 13, 2026
Issued at HKT 12:50
Issued at HKT 12:50
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