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HK Govt Clarifies No "Price Hike Before Subsidy" by Oil Firms; Diesel Price Rise Due to Middle East Situation
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To support public or commercial vehicles and vessels using diesel as fuel, as well as related industries and commerce, the HK Government launched a two-month diesel subsidy scheme starting April 30. Under the scheme, local diesel users can receive a subsidy of HKD3 per litre when purchasing diesel, thereby lowering the retail price by HKD3 per litre. In response to recent comments suggesting that diesel prices have risen, inferring that oil companies and distributors increased prices in advance after the government announced the subsidy plan on April 10 in order to "capture the subsidy," and further claiming that the posted diesel price had increased by nearly HKD3 per litre within the following 20 days, a spokesperson stressed that such claims are inconsistent with the facts. The government clarified that, affected by the Middle East situation, fossil fuel prices have risen globally and are not unique to Hong Kong. Drawing the conclusion that oil companies may have pre-emptively raised prices to "capture the subsidy" ignores the broader global context. The HK Government stated that, compared with the period before the conflict, the international refined oil price of diesel once rose by as much as around HKD10 per litre, while the maximum increase in the local posted retail price of automotive diesel was HKD7.5 per litre. Since mid-April, international refined oil prices have increased by about HKD0.5 per litre (+6.67%). Over the same period, the Mainlands maximum retail price of diesel has been raised twice, up by about HKD0.4 per litre (+4%), while the local posted diesel price has increased by HKD0.6 per litre (+1.66%). In addition, some oil companies have reduced their retail diesel prices today, though diesel prices are expected to remain volatile amid instability in the Middle East. The government said it has a responsibility to ensure public funds are properly used and has incorporated multiple safeguards in designing the subsidy scheme to ensure users benefit. After completion of the subsidy scheme, oil companies and distributors will be required to submit audited reports to the government. They must detail changes in the average retail price after deducting all discounts and compare them with corresponding import prices before and during the subsidy period. If there are changes in the ratio, it may indicate "capturing the subsidy," which auditors can readily identify. The government can follow up and pursue accountability based on the audit reports. The government said it will fully implement the above arrangements and strictly monitor the scheme to ensure it genuinely benefits users affected by rising diesel prices. (ha/da) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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