The Legislative Council has passed a resolution to extend the concessionary duty rate on ultra-low sulphur diesel of $1.11 a litre for another year. It will cost the Government about $1.1 billion next year.

The Financial Services & the Treasury Bureau said the rate would revert to $2.89 per litre on January 1, 2007.

The decision has taken into account the pressure the transport sector faces, the overall economic conditions and the Government's fiscal position.

This is the seventh extension of the concessionary rate on diesel duty. Concessions since 1998 and the current extension will have cost about $8.9 billion in revenue in total.