An interesting letter from David Webb in Sunday’s paper:
I am responding to David Beaves’ question on why private motorists cannot convert to liquefied petroleum gas or buy LPG cars in Hong Kong (“Government has got it wrong on LPG policy”, July 15).
No doubt the government will say it is because of a shortage of LPG stations, but this has nothing to do with it. The real reason is it subsidises the commercial road transport sector by exempting LPG from fuel duty.
The beneficiaries are the owners of taxis and, more recently, minibuses.
For the same reason, private motorists cannot buy fuel-efficient diesel-powered cars of the type which are popular in Europe. Ultra-low-sulphur diesel is taxed in Hong Kong at only HK$1.11 per litre, while petrol is taxed at HK$6.06.
This subsidises the transport trade. To prevent private motorists benefitting from this subsidy, the government deliberately raised the emissions standards for private diesel cars above European levels, to such a point that no car would currently qualify, while continuing to allow trucks and buses to belch out smoke from older, dirtier, diesel engines.
Franchised buses are even exempt from diesel duty, keeping fares artificially low, which makes rail transport less competitive, keeps roads congested and necessitates harbour reclamation for more roads.
The government’s socialist transport policy is in need of a comprehensive overhaul based on market principles.
It’s somewhat ironic that the government of Hong Kong does indeed operate in what David Webb calls a “socialist” way (at least in some sectors, notably transport) whilst having a reputation for being non-interventionist. However, I’ll leave that debate for another day.
I was not aware that diesel cars were effectively banned from Hong Kong. What a strange state of affairs.
As for LPG, I recall that taxi operators were given various incentives to covert, and the low price of the fuel is part of that policy. There is also a plan to get minibuses converted to LPG, but that isn’t going so well. The government recently claimed the policy was working (Nine-year high for Hong Kong’s blue skies), which prompted much derision from green groups, but the switch to LPG has certainly had a positive impact.
What I had expected was that after the network of LPG filling stations was established, it would become possible for private cars to use the fuel, but Webb seems to think that is not going to happen. I suppose it’s too much to hope that the government might explain its policy…
Ordinary Gweilo 
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