Diesel Subsidy Scheme to end on June 29 as scheduled
The Inter-departmental Task Force on Monitoring Fuel Supply (the Task Force) announced today (June 26) that the two-month Diesel Subsidy Scheme (the Scheme) will end at 11.59pm on June 29 as scheduled.
Since the outbreak of the conflict in the Middle East region, the Government has been closely monitoring geopolitical changes and tracking fuel supply and price fluctuations. The Task Force, led by the Financial Secretary, was established to dynamically assess geopolitical development and fuel supply and prices, to ensure the stability of Hong Kong's energy supply, and to closely examine the impact of oil price fluctuations on various industries.
In formulating support measures, the Task Force took the following principles into account:
(1)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;
(2)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 mechanisms;
(3)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;
(4)Given the unpredictability of the military conflict and the ongoing ceasefire negotiation, any support measures shall be temporary and short-term in nature, so as to avoid creating risks to public finances; and
(5)It is considered that public transport services (including franchised and non-franchised buses, minibuses and ferries) as well as school buses and residential buses, whose operating costs are highly susceptible to fluctuations in diesel prices, should be regarded as priority sectors for consideration of support.
The earlier closure of the Strait of Hormuz led to uncertainty on short-term oil price trends. In this connection, the Task Force introduced the Scheme among other measures, having taken into account the aforementioned principles and carefully balanced among factors such as the current fiscal position and the principle of prudent use of public money. The Scheme commenced implementation on April 30 for a period of two months, under which users consuming diesel locally may receive a subsidy of HK$3 per litre of diesel when they purchase diesel.
The United States and Iran both announced the re-opening of the Strait of Hormuz after having signed a Memorandum of Understanding. Based on the latest futures market data, the Government Economist estimates that international refined oil prices for diesel would gradually decline for the remainder of the year.
As the support measures are temporary and time-limited in nature, and to prevent risks to public finances, the Task Force decided that the Scheme will end at 11.59pm on June 29 as scheduled upon the expiration of the two-month period. The Task Force 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.
The Government will make announcement in due course on the arrangements of the other two time-limited measures, i.e. toll waiver for commercial vehicles and liquefied petroleum gas fuel subsidy.
Source: AI-found images
