People 'getting impatient' for reduction in ultra-low-sulphur fuel, says economics boss

Oil companies were urged by a senior official yesterday to cut the retail price of the cleaner ultra-low-sulphur diesel, which is subject to government tax concessions.

Secretary for Economic Services Sandra Lee Suk-yee said the companies had a responsibility to reduce the price.

'I think it's time they realised people can get impatient,' said Ms Lee. 'They should take action to reduce the price quickly.' She said that she was determined to introduce more competition in the oil-supply business. One possible way was to let in more oil firms.

There have been widespread calls from legislators and the public for a cut in the price of the cleaner fuel. In July, the Government agreed to give oil companies a tax concession of 89 cents a litre - the estimated difference between the price of normal diesel and cleaner fuel - but it later emerged the new fuel was only 40 to 46 cents more expensive.

Ms Lee said the Government would decide next month on the review of the concessions granted to the cleaner fuel. This will be based on three factors: changes in oil prices, the business environment of the transport industry and the Government's financial situation.

However, she refused to say if the administration would remove the concession should the companies refuse to cut prices. Caltex has said it will consider reducing prices when fuel import prices come down this month.