Financial secretary hints at review over diesel taxes
The government is looking into the possibility of reducing or scrapping diesel taxes, Financial Secretary John Tsang Chun-wah said yesterday, as hundreds of commercial vehicle drivers staged slow-drive protests against soaring diesel prices.
Mr Tsang told the Legislative Council's financial affairs panel that the government understood the difficulties drivers faced due to rising fuel prices. However, the administration needed to study the overall impact of cutting or scrapping fuel taxes.
'Apart from financial concerns, we have to look at the influence on the transport industry and the environment as well ... and whether this will encourage people to consume more fuel,' Mr Tsang said.
He said the government had cut the tax levied on Euro V diesel by half to 56 cents a litre since December and had applied a concessionary tax rate of HK$1.11 a litre for ultra low- sulfur diesel for several years.
'I will review the tax rates on Euro V diesel,' he said, adding that tax reductions for other fuel such as liquefied petroleum gas would also be considered.
Chiang Chi-wai, spokesman for the Fuel Price Concern Transportation Joint Conference, which organised yesterday's protests, said drivers were being 'crushed'.
More than 500 drivers of 15 types of vehicles staged slow-drive protests yesterday. Over 200 trucks and heavy vehicles were driven slowly in Kwai Chung, with 60 rubbish trucks and dump trucks taking part in Tseung Kwan O and 60 coaches in Man Kwong Street, Central.
Twenty vans were driven slowly from the Central ferry pier to the Murray Building, while 20 trucks and coaches blocked Central for an hour.
Four trailer trucks and two light vehicles blocked the four-lane road in front of the Cheung Kong Center at 4.15pm for 45 minutes.
More than 200 drivers protested in front of Government House in a failed attempt to address Chief Executive Donald Tsang Yam-kuen.
They pulled iron bars from a fence to force their way in, but were stopped by police.
They demanded the government cancel diesel taxes, exempt diesel stations from land premiums and stop its attempt to make the use of Euro V diesel mandatory from next year.
Police last night arrested 12 men, aged 37 to 56, for conspiracy to cause public nuisance. They were later released on bail. Three drivers were staging an all-night sit-in outside Government House.
Fuel stations stopped selling ultra-low-sulfur diesel in December as a result of the lower tax on Euro V diesel. However, the price of Euro V diesel increased from HK$9.37 a litre in December to HK$11.16 last month.
Ultra-low-sulfur diesel cost HK$9.72 a litre in November.
Mr Chiang said in the past five months the cost of diesel had risen by HK$5,000 a month for container vehicles, HK$3,000 a month for coaches and buses and HK$2,000 for minibuses.
The government says Euro V diesel, also known as sulfur-free diesel, is 'greener' because its sulfur content is no more than 0.001 per cent. Drivers say it yields less energy than ultra-low-sulfur diesel, leading to increased fuel consumption.
An Environment Bureau spokeswoman said the government was reviewing the concessionary duty arrangement for Euro V diesel.
