Following is a question by the Hon Chan Hok-fung and a written reply by the Secretary for Transport and Logistics, Ms Mable Chan, in the Legislative Council today (October 14):

Question:

     Over the past three years, international oil prices have risen sharply, resulting in a surge in fuel costs for Hong Kong's licensed ferry operators (operators). Given that outlying island ferries are the only means of external public transport for the majority of outlying island residents, there are concerns regarding the impact of oil price fluctuations on public ferry services. In this connection, will the Government inform this Council:

(1) of the changes in the average price of commercial diesel used by ferries in Hong Kong over the past three years;

(2) whether the authorities know the respective overall total fuel consumption and rates of increase in fuel expenditure for each public ferry operator (for both inner harbour and outlying island routes) over the past three years; and whether they have assessed the impact of soaring oil prices on the revenue and profit position of the various operators;

(3) of the details of the various subsidy schemes introduced by the authorities for operators over the past three years (including short-term diesel subsidies), as well as the amount of subsidy per litre of diesel available to each operator, the subsidy period and the coverage of the subsidy; whether the authorities have assessed if the subsidy amounts can offset the additional costs arising from the increase in oil prices;

(4) of the number of fare adjustments, the average rate of increase and the highest rate of increase for each public ferry route over the past three years; the details of the number of ferry trips reduced, routes suspended or reduced, and adjustments to service hours during the same period as a result of cost pressures (provide the above data in tabular form);

(5) whether the authorities have assessed the actual impact of the above measures of fare adjustment and ferry trip reduction on the commuting of outlying island residents, students travelling to school, elderly people seeking cross-district medical treatment, local tourism and commercial activities; and

(6) whether the authorities will introduce short to medium-term measures to support ferry services; if so, of the timetable and details?

Reply:

President,

     The Government has been paying close attention to the impact of the rising international oil prices on Hong Kong's transport and freight industries. In the light of the sharp rise in international oil prices since March this year, the Transport and Logistics Bureau and Transport Department (TD) have been maintaining close liaison with various public transport operators (including ferry operators) to understand their operating situation. Having consulted the Environment and Ecology Bureau, the reply to Member's question is as follows:

(1) and (2) Generally speaking, local retail fuel prices are determined by oil companies having regard to market principles, and depend on a host of factors, such as the procurement costs, transportation and storage costs, operating costs, land premium and tax. Most ferry operators generally procure diesel from oil companies/diesel distributors through contracts, and do not follow the prices displayed at petrol filling stations. At present, international crude oil prices remain volatile. The price of commercial diesel used by ferries surged starting from March this year. Despite a subsequent decline in the middle of the year, it has climbed back to a high level in recent months.

     According to the information provided by ferry operators, during the period from 2024 to August 2026, the fuel consumption of the various operators remained largely stable. The average monthly fuel consumption and fuel costs per litre were as follows:
 

Year	2024	2025	2026 (as at August)
Average monthly fuel consumption (million litre)	3.2	3.2	3.3
Average fuel cost per litre	$6.4	$5.2	$7.6

     Fuel expenditure is one of the major cost items of ferry operations. In particular for outlying island ferry routes with longer journeys, fuel expenses generally account for about 30 per cent to 40 per cent of their total operating expenses. The sharp rise in fuel prices has increased the overall operating costs of ferry services, placing operational pressure on operators.

     The TD will continue to maintain close communication with various operators and monitor their operational and financial situations, with particular attention to the potential pressure that oil prices may have on the operators' financial situation.

(3) In view of the outbreak of the conflict in the Middle East region, the Government implemented a two-month Diesel Subsidy Scheme (the Scheme) on April 30, 2026, under which various public ferry operators were eligible for a subsidy of $3 per litre of diesel. Based on their actual fuel consumption, the subsidy amounts received by individual ferry operators under the Scheme ranged from approximately tens of thousands to several million dollars, alleviating some of the operational pressure arising from fluctuations in diesel prices.

(4) Details of the fare adjustments made by various ferry operators and their service adjustments implemented due to cost considerations during the period from 2024 to August 2026 are set out in Annex. Generally speaking, operators will review service levels having regard to factors such as the actual operational needs of individual routes, passenger demand, and cost savings, with a view to making optimal use of ferry resources.

(5) The Government attaches great importance on the role of ferry services in meeting the day-to-day commuting needs of outlying island residents and supporting local economic activities. Overall speaking, when considering operators' applications for fare adjustments, the TD will carefully consider various factors in accordance with the established mechanism, including public acceptability, as well as the financial position, service performance, operating data and long-term financial sustainability. of the operators. When considering applications for service adjustments, the TD will examine whether the proposed service adjustments align with changes in the transport demands in the district and holistically consider the operator's operating conditions, including whether the proposed adjustments would help the operator make better use of resources and enhance overall operational efficiency while safeguarding its financial sustainability, with a view to ensuring that the service remains stable.

     The aforementioned fare and service adjustments were made following careful consideration by the TD, with a view to striking a balance between the financial sustainability of ferry services and the travel needs of the public, thereby minimising the impact on residents as far as practicable. Taking the fare adjustments implemented on the six major outlying island ferry routes in April 2026 as an example, after assessing the applications, the TD substantially reduced the fare increase rate from the 15 to 30 per cent as applied by ferry operators to 8 per cent for multi-journey tickets and 12.5 per cent for single-journey tickets, and required the operators to introduce more diverse multi-journey ticket arrangements to alleviate the fare burden on the outlying island residents. Based on the TD's observations, the fare and service adjustments concerned could still address the travel needs of the residents in general.

(6) The Government has all along encouraged ferry operators to maintain their long-term financial stability by a multipronged approach of concurrently enhancing farebox and non-farebox revenue. Meanwhile, the Government continues to alleviate the operating costs of ferry operators through different ongoing measures, such as providing Special Helping Measures to outlying island ferry routes to reimburse operators with certain operating expenses on an accountable basis, as well as reimbursing pier rentals and exempting vessel licence fees for eligible operators including those operating in-harbour routes. The Government also purchases new vessels for outlying island ferry routes under the Vessel Subsidy Scheme to enhance the quality of the fleet, operational efficiency and passenger experience. The TD established an inter-departmental task force in June 2026 to expedite the approval of ferry operators' applications related to commercial activities and proposals to improve pier facilities, thereby facilitating the operators' generation of non-farebox revenue, with a view to enhancing their financial sustainability. The TD will also maintain close communication with ferry operators to explore different measures that help enhance operational efficiency, facilitate operation, as well as increase revenue and reduce costs, so as to ensure the sustainable and stable operation of ferry services.

     Furthermore, the Inter-departmental Task Force on Monitoring Fuel Supply led by the Financial Secretary will continue to dynamically assess the situation in the Middle East region, and fuel supply and prices, so as to ensure the stability of Hong Kong's energy supply. Given the uncertainty of the future trend of oil prices, the Government will continue to closely monitor the development to ensure that the operation of public transport services (including ferry services) remains normal.

Ends/Wednesday, October 14, 2026
Issued at HKT 12:20

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