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 two years. This is the eighth extension, and will cost the Government $1.1 billion per year for 2007 and 2008.

The Financial Services & the Treasury Bureau said the decision was made after noting the pressure faced by the transport industry, Hong Kong's overall economic conditions and the Government's fiscal position.

When ultra-low sulphur diesel was introduced in July 2000, the duty was set at a low concessionary level of $1.11 per litre for environmental reasons, to facilitate a switch from regular diesel to this cleaner, but more costly, fuel. Since then, diesel-fuelled vehicles in Hong Kong have completely switched from regular diesel to the cleaner fuel.