Debate over whether to extend ultra-low-sulphur fuel concessions nears deadline

A decision will be made this month on whether a duty concession on ultra-low-sulphur diesel will continue for another year, the Acting Secretary for Treasury said yesterday.

Stanley Ying Yiu-hong said that the Government would lose $600 million if the concession on the green fuel's duty remained until the end of next year.

He said the Government had already lost $2.4 billion since mid-1998 as a result of measures taken to help reduce the duty on environmentally friendly diesel.

'We understand the difficulties the transport industry is facing but we cannot neglect the impact on revenue,' he said. Without providing details, Mr Ying stressed that different proposals were being considered to ensure the lower duty benefited consumers rather than oil companies.

His remarks came as legislators joined forces last night to call for an extension of the concession. A motion, sponsored by Miriam Lau Kin-yee of the Liberal Party and amended by Democrat Fred Li Wah-ming, suggested the concession be extended to December 31 next year.

The concession, which was introduced in July and expires next month, was aimed at encouraging drivers to switch to greener fuel. But oil companies have been accused of reaping unreasonable profits from the fuel as they enjoy a concession of 89 cents a litre even though the fuel is 40 to 46 cents more expensive than normal diesel.