HK utilities face mounting fuel cost pressure

Starting today, the city's two power companies will raise fuel surcharges.

Towngas says rising raw material prices create pressure on their cost, and they are discussing the situation with the government.

Naphtha accounts for 30% of the fuel mix of Hong Kong's town gas while 70% of it comes from natural gas.

While the last fare hike was introduced in August 2024,Towngas says the cost of naphtha has doubled since January

As for natural gas, Towngas signed a 25-year contract with an Australian supplier back in 2006, which allows its cost to remain stable.

As the contract will expire in 2031, it is now discussing with the supplier in contract renewal.

Towngas adds gas sales in the first half of the year fell by 3% year-on-year, mainly due to hot weather leading to reduced residential gas sales, while the use in hotels and dining sectors saw a slight increase.

Hong Kong residents' travel habits to the mainland have also affected commercial gas sales.

The annual gas sales volume is expected to dip by less than 3%.

The development of the Northern Metropolis is estimated to add 1.5 million new customers, and bring additional gas sales.