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Gary Cheung

Drivers dismiss the gesture and threaten protest if they don't get bigger reduction

The government has decided to extend the duty concession for ultra-low-sulfur diesel until December next year in an attempt to ease the burden of soaring oil prices on the transport industry.

Financial Secretary Henry Tang Ying-yen  said yesterday the concession of $1.11 per litre would be extended for a year from December.

But the finance chief ruled out a complete exemption of duty on diesel,  saying it was a crucial source of government revenue.

A group representing transport operators  dismissed the extension of the concession  as meaningless, and said  it may stage a slow-drive protest if the government did not respond to their demands for a further cut in diesel duty.

Mr Tang said the decision to extend the concession  had been made after careful consideration of the government's fiscal position and economic situation.

'High oil prices, sustained over a long period of time, will pose many challenges for our economy, especially our transport industry,' he said.

'We believe this is as far as we can go.'

The government stands to lose $1.1 billion in revenue from the 12-month extension of the concession.

The price of diesel has risen nearly 20 per cent this year, to $7.24 a litre.

Chiang Chi-wai,  convenor of the Joint Committee of the Transport Trade on Monitoring Fuel Prices, said the extension of the diesel duty concession would not ease  the burden on transport operators.

'The government hasn't cut the duty at all. It is cheating the public by claiming that it is helping us,' he said.

Miriam Lau Kin-yee,  the legislator representing the transport sector, will table a motion in the Legislative Council  next month calling for a halving of the  duty payable on ultra-low-sulfur diesel.

Mr Chiang said his group, representing 22 organisations, would stage a slow-drive protest from Tsing Yi Island after passage of the motion if the government failed to respond to the call for a cut in diesel duty.

Mr Tang said the Competition Policy Advisory Group, of which he is chairman, would investigate  whether oil companies  were  adopting anti-competitive practices in setting prices.

He  also said the government  would ask Guangdong authorities to relax restrictions at the border  to  enhance the competitiveness of the transport industry.

The restrictions include the 'four up, four down' rule, which requires trucks crossing the border to carry the same containers on the outbound and inbound legs of each round trip.

The government also hopes to ease the 'one truck, one driver' rule, under which  there is one designated driver and  anyone else is barred from taking the wheel.



Rebate on diesel duty extended by a year