HK Electric to cut May fuel charges but warns of sharp future increase
Fuel charge to fall for second month as lower earlier costs feed through, but Middle East conflict likely to push up prices later this year
HK Electric will cut fuel surcharges for customers in May but has warned that costs could rise significantly later in the year due to the impact of the conflict in the Middle East.
The company said on Friday that its fuel clause charge for May would fall by 4.4 HK cents per kilowatt-hour to 26 HK cents per kWh, citing a deferred effect under the monthly adjustment mechanism based on January’s average fuel costs. The decline marks the second consecutive monthly drop.
“Although international fuel prices have risen sharply since March amid geopolitical developments, the relatively lower fuel costs recorded in the first two months of the year, together with adjustments to the fuel mix and fuel-supply arrangements made in response to the Middle East’s situation, have provided a certain buffer for customers,” it said.
HK Electric supplies power to Hong Kong Island and Lamma Island, while its larger rival, CLP Power, serves Kowloon, the New Territories and Lantau Island.
Earlier this month, the United States and Iran reached a temporary agreement to halt the conflict. However, the dispute has disrupted global energy supplies, including intermittent closures of the strategic Strait of Hormuz, through which roughly 20 per cent of the world’s oil supply travels.