Hong Kong’s inflation rate edged slightly higher in March as surging global oil prices linked to the Middle East crisis pushed up fuel-related costs. Economists and power companies warned that the pressure may become more pronounced in the coming months if energy prices remain elevated.
Official data released by the Census and Statistics Department on Thursday showed that the city’s overall consumer prices rose 1.7 percent year-on-year in March, up from an average 1.5 percent increase in the first two months of 2026. Underlying inflation, which excludes the effects of one-time government relief measures, stood at 1.6 percent.
The figures pointed to a broad but still moderate increase in prices across Hong Kong’s economy. Compared with a year earlier, prices rose in categories such as miscellaneous services, transportation, electricity, gas and water, miscellaneous goods, alcoholic drinks and tobacco, basic food, housing, and dining out and takeaway food.
Conversely, prices for durable goods, as well as clothing and footwear, declined from a year ago.
A government statement said consumer price inflation remained moderate in March despite the increases. The government spokesperson said that the acceleration reflected mainly faster price increases in fuel-related components, as international oil prices climbed amid the conflict in the Middle East, while price pressures in other areas remained largely contained.
That trend has been evident at gasoline stations across the city. Crude oil prices have jumped sharply, coupled with continued high volatility, since fighting broke out in late February, with benchmark prices again topping $100 a barrel earlier this week. In Hong Kong, pump prices have also climbed to record levels, with standard unleaded gasoline exceeding HK$32 ($4.08) per liter, and premium grades reaching HK$34 per liter before discounts.
Gary Wan Ka-wai, chief economist and strategist at Dah Sing Financial Group, said sharp increases in vehicle-fuel and precious-metal prices have driven more rapid increases in transportation fares and jewelry prices.
Wan said that if oil prices remain persistently high, they will exert upward pressure on the prices of transportation, energy, and consumer goods more broadly in the coming months.
Dah Sing maintained its forecast for Hong Kong’s yearly inflation at 1.5 percent, higher than the underlying inflation rate of 1.1 percent that was recorded in 2024 and 2025.
The government also said elevated international oil prices are likely to continue gradually feeding into consumer prices in the near term, though the ultimate impact will depend on how the Middle East situation develops.
The spokesperson added that short-term targeted measures had already been rolled out to cushion the immediate effects of higher fuel costs. Since April 9, the package has included a HK$3-per-liter diesel subsidy and a 50 percent cut in government tunnel tolls for commercial vehicles.
Authorities said those measures, together with still-contained price pressures from nonenergy sources, should help limit broader inflation.
Fuel surcharges lowered
On Friday, Hongkong Electric, one of the city’s two main power suppliers, said its fuel-clause charge will fall in May but is expected to rise “significantly” in June because of the steep increase in international oil and natural gas prices.
For May, the fuel-clause charge will be 26 Hong Kong cents per kilowatt-hour, down 4.4 cents from April. That follows an earlier 3.6-cent reduction in April from 34 cents in March. The company said the decline reflected a deferred effect under its monthly adjustment mechanism, which calculates charges based on the average actual fuel costs incurred over the previous three months.
A recent bill seen by China Daily showed that a single-person household using 133 kWh over 30 days from March 20 to Monday charged HK$115 in basic tariffs and HK$42 in the fuel-cost adjustment.
Hongkong Electric said lower fuel costs earlier this year “have provided a certain buffer for customers”, but warned that the surge in fuel prices since March is expected to take effect from midyear, and lead to a significant rise in the fuel-clause charge, which will be reflected in electricity bills. A spokesman said the company merely passes on actual fuel costs and does not profit from the higher charge.
CLP Power, the other major electricity provider, earlier announced that as of April 1, its fuel-cost adjustment stands at 39.8 cents per kWh, 0.6 cents higher than in March. Its May charge has yet to be announced.
Contact the writers at shamim@chinadailyhk.com
