TNAG-1449-FCO40-1953-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1986 — Page 248

Question 9

Given the effects of the price of oil on the cost of living and the economy, can the Government say :-

(a) Why there has been no significant downward

adjustments of the prices of fuel despite the drastic reduction in oil prices in the last six months; and on the other hand,

(b) Why fuel suppliers are quick to increase

their prices when there is any increase in oil prices; and

(c) Whether the Government has any powers to

remedy this unsatisfactory state of affairs in the interests of consumers?

REPLY BY THE HONOURABLE THE FINANCIAL SECRETARY

IN LEGISLATIVE COUNCIL ON WEDNESDAY 12 MARCH

1986

Sir,

It is not Government policy to seek to influence the level of oil prices or indeed any other commodity. The major oil suppliers in Hong Kong in a competitive market set the prices of oil products based on commercial considerations, taking into account such factors as the import price, cost of operation and, of course, profit. It would be inappropriate for the Government to intervene in the workings of the free market economy, or formally to comment on the reasons for oil price fluctuations. Naturally we encourage competition which is the proper enemy of monopolies.

In answer to my Honourable Friend's third point, the Government does have certain powers in relation to oil supply, but these are for use only in extreme circumstances. The Oil (Conservation and Control)

Ordinance (Cap. 264), introduced at the time of the 1979 world-wide oil shortage, enables the Director of Oil