Appeals for tax on fuel to be scrapped

PUBLISHED : Friday, 28 February, 2003, 12:00am
UPDATED : Friday, 28 February, 2003, 12:00am

With war looming in Iraq, Hong Kong's transport industry has intensified calls for government relief from surging energy prices.

A vehicle protest aimed at urging the government to abolish the tax on diesel fuel is expected this morning on Hong Kong Island by 20 organisations representing diesel-burning freight and passenger transport operators. More than 200 diesel vehicles are expected to join the protest.

Meanwhile, 12 international airlines operating in Hong Kong have also applied to the Civil Aviation Department (CAD) for the right to levy a jet fuel surcharge on passengers.

Secretary for Economic Development and Labour Stephen Ip Shu-kwan said yesterday that rising oil prices would have limited impact on Hong Kong, with the aviation, transportation and catering industries most affected.

The transport operators have called on the government to abolish the tax of $1.12 per litre, which they say is hampering the economic recovery.

Oil prices hit a 27-month high this week of US$33 (HK$257) per barrel - up from an average US$22 in the first quarter of last year.

A spokesman for the group, Wong Kei, said: 'This is going to have insignificant impact on the government revenue. But it would be a big lift for our businesses as it would enhance our competitiveness and bring cheaper services to our customers.'

The CAD said that the 12 airlines were seeking to impose fuel surcharges ranging from HK$40 to US$13 per one-way ticket.

A spokeswoman said it was processing the applications but gave no indication of when a decision would be made.

'We will take their prices and the proposed amounts of surcharge into account. We will also consider their operation costs and see whether there is a need for such an arrangement,' the spokeswoman said.

Cathay Pacific Airways has not applied for the surcharge but spokeswoman Rosita Ng Lai-ting said the airline was 'closely monitoring the situation'.