The price of petrol in the Greater Bay Area (GBA) is expected to go up due to the ongoing war between Iran, Israel and the US, which raised international oil prices to a four-year high of US$119.5 per barrel yesterday.
Although the price of oil has since fallen, Iran’s de-facto closure of the Strait of Hormuz – an important maritime passage located to the country’s south – has prevented large quantities of Middle Eastern oil shipments from being transported worldwide.
According to Hong Kong broadcaster TVB, in the week after the war broke out on 28 February, the price of unleaded at one petrol station in the city’s Wan Chai district rose from HK$29.69 on 2 March to HK$30.59 on 9 March.
Increases are expected to continue, especially after China’s National Development and Reform Commission (NDRC) announced yesterday that it had lifted gasoline prices to 695 yuan per tonne and diesel prices to 670 yuan per tonne. This means that motorists will end up paying an additional 27.5 yuan to refill a 50-litre tank.
Shenzhen News reports that local motorists have been lining up at a gas station in Longhua district in recent days to fill up their vehicles prior to any price hike.
One freight truck driver, identified by the surname Wang, told the news outlet that the financial pressure was great for drivers such as himself, who cover distances of more than 200 kilometres per day. Wang pointed out that the updated prices would result in his monthly diesel expenses jumping by several hundred yuan.
As for whether or not the oil price surge would affect the price of groceries and goods, the head of the Macau Economic Association, Lao Pun Lap, told Macao broadcaster TDM that it would depend on the duration of the ongoing Middle Eastern conflict.
[See more: Around 3,000 Chinese nationals have been evacuated from Iran, says Beijing]
Lao expressed confidence that China would be able to keep commodity prices stable and reduce external inflationary pressures.
Still, experts in Hong Kong have warned that residents in the city could end up paying more for electricity, as a result of the knock-on effect from higher oil prices.
Speaking to TVB, William Yu, a former member of the city’s Energy Advisory Committee, said the cost of electricity could go up as soon as next month, although the scope of the price jump would hinge on a number of factors, including the amount of oil reserves and the length of the conflict.
Yu mentioned that the impact this time would be greater than during the Russia-Ukraine war, as the Iran War covered a much larger area. At the same time, it is also impacting the transport of natural gas, which one of Hong Kong’s main electricity suppliers – HK Electric – is reliant on.
The aviation industry is also not immune to the increase in oil prices. Hong Kong Airlines announced today that starting from Thursday, it would raise the fuel surcharge for long-haul, one-way flights to destinations such as Europe, Middle East and Africa by HK$150, from HK$589 to HK$739.
Meanwhile, passengers taking a one-way flight to locations such as Japan, South Korea and Thailand will see their fuel surcharge jump from HK$162 to HK$212, an increase of 30 percent.
It remains to be seen if other airlines will follow suit, although Hong Kong travel agencies that spoke to TVB noted that various local carriers had already made the decision to raise their fuel surcharges for both short and long distance flights. The former will see increases of HK$50 to HK$100, while the latter will rise by HK$200 to HK$300.
