The Legislative Council Finance Committee on Friday approved a HK$1.8 billion ($230 million) package to subsidize diesel purchases for local transport and logistics sectors, aiming to cushion rising operating costs amid surging global fuel prices triggered by the conflict in the Middle East.
Under the measure, the Hong Kong Special Administrative Region government will provide a limited-time subsidy of HK$3 per liter of diesel sold for local consumption over two months. The scheme targets public transport operators, school and residential bus services, and commercial vehicles and vessels that rely on diesel as their main fuel.
Deputy Financial Secretary Michael Wong Wai-lun said the subsidy amount disbursed will depend on eligible diesel sales volumes during the two-month period, regardless of fluctuations in global oil prices.
“The arrangement has no retrospective effect. Even if oil prices fall later, the HK$3 per liter subsidy will remain valid for the full duration,” Wong said.
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Lawmakers broadly welcomed the relief initiative but called for greater transparency and oversight in its implementation.
Legislator Joephy Chan Wing-yan urged the government to “closely monitor retail fuel prices” to prevent unfair competition. “Authorities must ensure no price gouging occurs, while shielding citizens and businesses from market volatility,” Chan said, adding that passenger transport and employment in affected industries should be safeguarded.
To enhance market transparency, the Environment and Ecology Bureau has started publishing, from early April, seven-day moving averages of retail unleaded petrol and diesel prices after walk-in discounts, together with international benchmark data on refined oil prices.
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The Competition Commission will coordinate with fuel suppliers to avert price collusion and ensure the subsidy benefits end users instead of being absorbed as windfall profits.
Ken Ip, associate director of the Innovative Incubation Centre at Saint Francis University, noted that the measure represents “a classic short-term stabilization tool.” He said the subsidy will help smooth cost shocks across the transport sector and prevent immediate price pass-through to consumers, which is particularly crucial in Hong Kong where logistics costs feed rapidly into inflation.
Wong said the government aims to roll out the diesel subsidy by the end this month, once operational arrangements with oil companies are finalized. The move is expected to prevent or defer fare and service fee increases for buses, minibuses, ferries and freight operators, while supporting employment stability in transport-related sectors.
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The two-month scheme will be reviewed after implementation to assess energy market conditions and determine whether further support measures are needed, according to official documents. Wong said the package remains “targeted and fiscally responsible”, balancing short-term relief with long-term prudence amid ongoing uncertainty in the Middle East.
The proposal was formulated by the Interdepartmental Task Force on Monitoring Fuel Supply, led by the Financial Secretary and established by the Chief Executive to address the conflict’s impact on global energy markets. The task force recommended that assistance remain temporary and focused, prioritizing public services such as school and residential bus operations while excluding private-use vehicles from primary consideration.
Contact the writer at jessicachen@chinadailyhk.com
