The Financial Services & The Treasury Bureau has proposed to extend the concessionary duty rate on ultra-low sulphur diesel of $1.11 per litre for another year. It will cost the Government about $1.1 billion next year.

According to the Dutiable Commodities Ordinance , the Government will move a resolution in the Legislative Council by year's-end to extend the concessionary duty. The rate will revert to $2.89 per litre on January 1, 2007.

The bureau said the decision has taken into account the pressure faced by the transport sector due to high oil prices, and the overall economic conditions and Government's fiscal position.

On proposals to make further concessions or even to abolish the duty, the bureau said it is neither a feasible measure nor a solution to high oil prices.