HK Electric said on Thursday that its fuel clause charge for April will be reduced to 30.4 HK cents per unit of electricity, down from 34 cents in March, but warned that charges could rise sharply from mid-year if global fuel costs remain elevated amid ongoing Middle East tensions.
A company spokesman said the current monthly adjustment mechanism has a deferred effect when fuel prices fluctuate significantly. As a result, the lower April charge does not yet reflect recent disruptions in global fuel supply linked to tensions in the Middle East.
He warned that the fuel surcharge is likely to increase from around mid-year if higher fuel costs persist or continue to rise.
HK Electric’s net tariff comprises the basic tariff and the fuel clause charge. The company noted that fuel prices are influenced by factors beyond its control, including market supply and demand, geopolitical developments, and macroeconomic conditions.
Under the Scheme of Control Agreement with the government, fuel costs are passed through to customers on an actual-cost basis and do not affect the company’s earnings.
Since 2019, the fuel clause charge has been adjusted on a monthly basis, with each month’s rate based on the average actual fuel costs over the preceding three months.
Following the reduction, the average net tariff for April will be 158.3 HK cents per unit of electricity, compared with 161.9 cents in March.
HK Electric said it currently relies mainly on natural gas and coal for power generation. In light of ongoing global uncertainty, the company said it will continue to monitor energy market conditions and manage fuel inventories, plant operations, and emissions obligations prudently.
It added that contingency measures are in place, including adjusting the fuel mix and activating standby coal units when necessary, to ensure a stable power supply.
