LettersSupport for Hong Kong business should not stop at fuel subsidies

Readers call for more relief measures to help SMEs cushion the energy price shock, dismiss talk of a fur comeback, and highlight the income inequalities in climate adaptation

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A motorcycle drives past the petrol price display board outside a petrol station in Causeway Bay, Hong Kong, on April 10. Photo: Jelly Tse

Published: 11:30am, 6 May 2026

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The government’s subsidy of HK$3 (38 US cents) per litre of diesel offers welcome relief to Hong Kong transport operators facing volatile fuel prices. Yet the ripple effects extend far beyond the pump. Small and medium enterprises across sectors report rising costs even without direct diesel consumption. Energy price shocks cascade through every link of the supply chain – ultimately landing on consumers’ shopping bills.

The journey from Middle Eastern oilfields to Hong Kong retail shelves involves countless energy-intensive touchpoints. Fertiliser costs drive up agricultural prices. Plastic resin costs inflate packaging expenses. Construction materials and cold-chain logistics all consume significant energy. These midstream inputs fall outside the fuel subsidy scheme, but their cost increases eventually surface in retail inflation.

SMEs face particularly acute pressure. Lacking the scale to negotiate better procurement terms or the market power to pass costs fully to customers, they see margins compressed from both ends.

We recommend more systemic relief building on current measures. Enhanced corporate tax deductions and accelerated refund processing of, say, overpaid provisional profits tax would directly improve business cash flow, giving firms more room to absorb cost pressures. Waiving or reducing fees – business registration fees, water charges, sewage fees – would provide immediate SME support.

Energy subsidies should also extend beyond diesel. The government’s offer of support to taxis, minibuses and school buses using liquefied petroleum gas (LPG) is a welcome development. However, some sectors, including courier and food delivery fleets, remain exposed to rising fuel cost pressures. Broader coverage would demonstrate more comprehensive policymaking.