Sweetener offer to cut diesel use

PUBLISHED : Wednesday, 13 September, 1995, 12:00am
UPDATED : Wednesday, 13 September, 1995, 12:00am

LICENCE fees and petrol tax for taxis and minibuses may be reduced in an attempt to persuade operators to give up diesel-powered engines.

The proposal comes from the Environmental Protection Department, which is eager to gain co-operation from the operators in phasing out all diesel taxis and minibuses.

The department believes petrol is a cleaner fuel for the environment. The operators, who are concerned about higher costs with the changeover, have rejected the suggestion.

Two transport groups have jointly embarked on a $200,000 study to prove that diesel is more economical and friendly to the environment if properly maintained, and that petrol could pose more danger to life.

The results are being finalised by four lecturers from the Hong Kong Polytechnic University.

The Government, meanwhile, has asked the University of Hong Kong to work on a study to prove the disadvantages of using diesel.

A source said the Government was going to put the plan before the Legislative Council when it resumed.

A package of tax reductions had been planned to counteract the operators' claims.

It includes reducing, by up to half, the yearly licence fees of $3,159 for a taxi and $8,429 for a minibus.

The package would also bring down the price of petrol to that of diesel via tax reduction under a quota system.

A taxi would be entitled to about 40 litres of low-tax petrol a day and a minibus would be entitled to 60 litres.

The price per litre for diesel at present is about $4 cheaper than petrol at $5.94, including $2.65 duty.

Unleaded petrol costs $9 per litre, of which $5.25 is duty. Leaded petrol costs $9.44, including $5.90 duty.

According to the operators, a diesel vehicle could last two years longer. It was also more powerful and diesel fuel was less flammable.

'It still seems more economical to use a diesel vehicle even with the tax incentive,' said Leung Charn-keung, spokesman for a joint group of taxi and minibus operators.

At present, franchised buses - Kowloon Motor Bus, China Motor Bus and Citybus - enjoy tax-free benefits on diesel.

Other diesel-powered vehicles on the road include coaches and lorries.

The revenue from taxing diesel on taxis and mini-buses is about $700 million. Mr Leung said it was doubtful the Government would be willing to give up all the tax revenue from this area.