Hong Kong consumers could soon pay more for gas after Towngas said it would increase tariffs by 4.8 per cent but promised no further adjustments in the next two years.
The company also announced raising the monthly maintenance charge by 5.3 per cent, or 50 HK cents (6.4 US cents), to HK$10 following a 26-year freeze.
With the new tariff, Towngas estimated about 70 per cent of its residential customers would pay no more than HK$10 extra for their gas each month.
About half of commercial and industrial customers would pay less than HK$330 extra a month, the company added.
In a press statement on Friday, the Hong Kong and China Gas Company attributed the need to increase tariffs to rising operating expenses and, to a lesser extent, a labour shortage.
“Over the past two years, the operational expenses have been escalating, while a shortage of skilled technicians in the gas industry also resulted in heightened labour costs,” the firm said.
“There is also the necessity for substantial capital investment in the forthcoming years to maintain safe and reliable services, as well as to supply gas to newly developed areas.
“It is anticipated that the aggregate capital investment for 2024 and the subsequent five years will amount to HK$9.8 billion.”
The firm also said some 43,000 families would be spared from the August round of tariff increase under the company’s concession schemes. It would include the elderly, people with disabilities, low-income earners and single-parent households.
The company said intended to raise its basic tariff by 1.3 HK cents per megajoule from August 1. The 4.8 per cent increase is equivalent to a 4.2 per cent rise in the average effective gas tariff – including basic tariff and fuel cost variation charge – in 2023.
“Concurrently, Towngas has announced that the basic tariff and the monthly maintenance charge will not be subject to further adjustments for the next two years,” the company said.
Towngas has raised its basic tariff eight times and the monthly maintenance charge once since 1997.
The basic tariff was last raised in August 2022 by 1.15 cents per megajoule, representing an increase of 4.4 per cent, while the monthly maintenance charge was last raised in 1998 by 50 HK cents, representing an increase of 5.6 per cent.
The Legislative Council environmental affairs panel will be briefed on the new tariff at a meeting next Monday.
Kwok Wai-keung, a legislator from the Federation of Trade Union and a member of the Legco environmental affairs panel, said the increase could be described as moderate, given the rising costs in recent years.
“The last increase was two years ago. It is acceptable that the company might need to adjust the tariff in the wake of inflation and rising costs,” Kwok said. “Having said that, it will inevitably increase the burden for Hong Kong families.”
Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, said medium- to large-sized restaurants could be the hardest hit by the tariff increase.
He estimated that they would have to pay about HK$5,000 more for gas every month.
“With an increase in operating costs, it is almost unavoidable that eatery operators have to adjust their prices accordingly and diners may have to dig deeper into their pockets,” Wong said.
Towngas has more than 2 million customers in Hong Kong, mainly residential.
While the firm’s tariff adjustment does not need approval, Towngas is required to consult the government three months in advance on such matters and brief the Legco environmental affairs panel and the energy advisory committee, according to a 1997 agreement.
