Towngas to freeze tariff; prices may dip

PUBLISHED : Wednesday, 06 June, 2012, 12:00am
UPDATED : Wednesday, 06 June, 2012, 12:00am

Towngas will freeze its basic gas tariff this year - and prices could even dip, depending on the state of the international oil market, the company announced yesterday.

But the announcement by the cooking and heating gas supplier came as little consolation to thousands of residents and businesses in Tai Po, who were without a gas supply for a second day yesterday due to a ruptured pipeline.

The freeze in the basic tariff does not necessarily mean prices will remain the same. Gas bills also include a fuel cost variation charge, which could yet go down if the international oil market continues to dip.

Brent crude prices touched their lowest level in 16 months on Monday, but a company spokeswoman said the market for the commodity was unpredictable. Oil prices are important because one of the components of Towngas is naphtha, produced by the distillation of petroleum.

Since 2006, cheaper natural gas has also formed part of the Towngas mix. 'Operating costs have been cut since we [began to use] natural gas in 2006,' the utility's managing director, Alfred Chan Wing-kin, said yesterday. He said the lower cost of the natural gas meant the company could keep the tariff down.

But cost was the last thing on the minds of 10,000 business and residential customers in Tai Po, the last of whom were due to be reconnected last night after being without a supply since 6.45am on Monday.

By 9pm yesterday, supplies had been restored to 9,000 homes, as well as restaurants in Elegance Garden, Uptown Plaza and Wan Tau Tong Estate, along with the laundry at the latter. Less than 1,000 homes that were still out of gas would be reconnected before lunchtime today, the gas firm said.

The disruption left some residents of the 14 private and public housing estates scratching their heads about what to do without hot water or fuel for cooking.

Some families reported using electric rice cookers to boil water to bathe with, while others used the same equipment to prepare meals.

Raymond Cheung Man-keung, of the Park Lane Seafood Restaurant, said the business had suffered losses of HK$160,000 during the two days of disruption. Fewer customers turned up for breakfast yesterday and its food selection was limited.

Although Towngas offered the restaurant a supply of liquefied petroleum gas cylinders, Cheung said using such a supply would not offer enough power to cook fried dishes.

James Kwan Yuk-choi, chief operating officer of Towngas, said it was too early to say whether customers affected by the disruption in Tai Po would be offered compensation. The problems started when a water main burst, denting the pipeline.

Lee Shau-kee, chairman of Towngas' parent company Henderson Land Development, defended the gas supplier's reputation yesterday.

'Ten years ago, accidents involving Towngas happened quite often. There were fires and people were injured, but it is no longer the case recently. We have spent a lot on safety measures and cost is not a concern,' he said.

Towngas last increased its basic gas tariff in April 2010, when it lifted the price per unit by 0.6 HK cents. Depending on monthly consumption, users pay between 20.95 HK cents and 21.90 cents per unit. It was only the second tariff increase in 10 years.

A spokesman for the Electrical and Mechanical Services Department said Towngas should file a report on the incident as soon as possible.