Govt unveils $1.8b diesel subsidy and toll waivers to combat surging fuel prices

The government has announced four key measures to tackle the recent surge in fuel prices, including a two-month diesel subsidy expected to cost HK$1.8 billion and a temporary reduction in tunnel tolls for commercial vehicles, aimed at easing the financial burden on the transport industry and mitigating pressure for fare hikes.

Diesel subsidy and price monitoring

The cornerstone of the relief package is a direct subsidy of HK$3 per liter for diesel, which will last for two months.

This measure is designed to support operators of public or commercial vehicles and vessels, as well as related industries that rely on diesel, helping to reduce their operational costs.

The government hopes this will, in turn, alleviate the pressure for them to raise prices for consumers. In conjunction with the subsidy, the Environment and Ecology Bureau will collaborate with the Competition Commission to closely monitor the pricing strategies of various fuel companies to ensure they do not take advantage of the situation for undue profit.

Toll waivers and special task force

A second measure involves a 50 percent reduction in tolls for all commercial vehicles at government-run tunnels. This two-month waiver will apply to trucks, buses, minibuses, and taxis but will exclude private cars and motorcycles.

The initiative is expected to result in a revenue loss of approximately HK$160 million for the government, which stated it will work with tunnel fee service providers to adjust their systems and implement the reduction as quickly as possible.

Additionally, the government will establish a "Special Application Task Force for Public Transport Services."

This group will be tasked with expediting the approval process for applications from public transport operators seeking to manage rising fuel costs. These applications could include proposals for service consolidation to enhance operational efficiency, the introduction of energy-saving measures, and other initiatives.

The task force will be led by the Secretary for Transport and Logistics, with the Secretary for Environment and Ecology as deputy, and will include the Commissioner for Transport and the Government Economist.

As a fourth measure, the government has committed to a continuous dynamic assessment of the situation. It will coordinate with relevant bureaus and departments to develop contingency plans and study various options for further alleviating the impact of rising oil prices.