Petrol prices cut by 10 cents

PETROL prices at the pumps of Shell and Esso stations dropped 10 cents at midnight, amid warnings that diesel prices could rise.

Formula Shell super unleaded and Formula Shell now cost $7.81 and $8.15 a litre respectively at the company's 59 stations.

Prices on Esso's supreme unleaded and supreme leaded dropped by the same amount.

The territory's other major suppliers - Caltex and Mobil - have yet to announce changes.

Caltex instigated the last round of petrol and diesel reductions in July, knocking five cents off the price in a move later matched by other suppliers.

Shell said more falls were expected.

However, colder weather traditionally increases demand for diesel - used in heating - and Shell warned that diesel prices were ''likely to firm''.

Meanwhile, the Executive Council has decided that better quality diesel fuel should be used in the territory from April 1995 to improve Hong Kong's air quality.

Under the Air Pollution Control (Amendment) (No 2) Bill 1993, the sulphur content of diesel fuel will have to meet European standards of no more than 0.2 per cent.

The introduction of higher quality diesel will reduce the sulphur dioxide emissions from vehicles by up to 40 per cent.