Cash grants fuel taxi licence premium rise
Taxi licence premiums have soared $100,000 in the past two weeks, since the launch of a cash incentive scheme to get cabbies to switch to liquefied petroleum gas (LPG), industry chiefs say.
The one-off $40,000 government grant for owners making the switch from polluting diesel fuel has made owning rather than renting a taxi more attractive, forcing up licence prices. Observers say prices could go up a further $100,000 in the next six months.
The Transport Department began offering the grants on August 8, and has received nearly 1,200 applications. The money is available for all diesel taxis until next year. After that, only those less than seven years old will be eligible.
Northwest Area Taxi Drivers & Operators Association chairman Wong Wing-chong said the premium for a taxi licence had risen by as much as $100,000 in the past two weeks, to about $1.6 million for a New Territories cab and $2.2 million for an urban taxi.
'The scheme, along with more LPG filling stations coming on line in recent weeks, has in fact made an unexpected impact on the taxi market,' he said. 'Some cab drivers who normally rent an LPG taxi to drive have now decided to become owners themselves. This switch of preference plus the grant has caused an upsurge in taxi trading activity.'
Taxi Operators Association chairman David Leung Shiu-cheong agreed and said the pace of the switch to LPG taxis was likely to pick up next year.
'With the concessionary duty of $1.11 on ultra low sulphur diesel to be increased to $2 in January, more owners will therefore be more inclined to replace their diesel taxis with LPG ones,' he said. 'Consequently, the taxi licence premium may go up by another $100,000 to about $2.3 million in the next six months.'
The Environment and Food Bureau, which oversees the LPG taxi programme, said it had not made any predictions on the response to the grant offer. A spokesman said the scheme was aimed at improving the environment, not providing a commercial opportunity.
There are 18,131 diesel taxis, of which more than 3,000 are believed to be due for replacement this year.
Under a government timetable to reduce polluting vehicle emissions, no new diesel taxis can be imported after January 1 next year. Diesel taxis more than seven years old will not have their licences renewed after 2003 and all diesel taxis must be off the road after 2005. There are about 300 LPG taxis.