Executive Summary
This report aims to deeply examine Hong Kong's current fuel price regulatory mechanism, the Competition Commission's investigations into oil companies, and combines the actual difficulties faced by the transport industry and specific opinions of drivers to propose long-term reform recommendations for the fuel pricing mechanism. The study found that Hong Kong's fuel prices have been persistently high, with a "quick to rise, slow to fall" phenomenon, placing a heavy burden on the transport industry and the general public. Despite the government's emphasis on free market principles, structural market issues and lack of transparency have led to widespread public dissatisfaction with the fuel pricing mechanism.
This report comprehensively analyses the current situation and proposes specific reform directions, including subsidising commercial van conversion to electric vehicles, establishing a fuel price stabilisation fund, reviewing fuel tax policies, and introducing a detailed "fare adjustment mechanism." Drawing on international experiences from Vietnam, Turkey, Singapore, and other countries, the aim is to enhance market transparency, protect consumer rights, and promote fair competition.
Chapter 1: Commercial Vehicle Drivers Fuel Price Pressure Survey (2026)
Key Points
- 602 valid responses; 84.7% from light van drivers
- 87.4% of drivers spend over 20% of income on fuel; 81.7% saw significant income decline (over HK$5,000/month)
- 82.9% report severe mental/physical health impact; 59.6% increased working hours
- Top demands: reduce licence/tunnel fees (80.9%), short-term fuel subsidy (80.6%), regulate fuel pricing with government approval (76.1%), platform fuel surcharge (68.9%)
To systematically reflect the real situation in the industry, Talk To You Now People Livelihood Progress Group conducted an anonymous survey to collect data on drivers' fuel cost increases, income impact, coping strategies, and policy demands.
To comprehensively understand the real impact of high fuel prices on commercial vehicle drivers in Hong Kong and the frontline industry's views on the existing fuel price regulatory mechanism and policy demands, Talk To You Now People Livelihood Progress Group completed the "Commercial Vehicle Drivers Fuel Price Pressure Survey 2026" and the "Research Report on Hong Kong Fuel Price Regulatory Mechanism and Reform Proposals 2026."
1.1 Research Methodology & Background
The research methodology included designing an online questionnaire and inviting professional drivers to participate, widely distributed through multiple driver groups, associations, and industry networks. Respondents were primarily light van drivers (84.7%), also covering tonnage trucks and other commercial vehicle categories. The study also employed qualitative interviews to supplement the data, maintaining contact with the local driver community "Cargo Van & Truck 9 Flow Flow," interviewing professional drivers and members to understand specific changes in order-taking, operations, fuel expenditure, and working hour arrangements.
In terms of data analysis, the study also referenced Hong Kong government public data, Competition Commission documents, media reports, and policy experiences from other regions, including fuel price stabilisation mechanisms, price adjustment arrangements, and market regulatory models from Vietnam, South Korea, Singapore, and Mainland China.
1.2 Sample Overview
Primary respondents include: light van, medium truck, heavy truck, dump truck, school bus, and tour bus drivers. Partners include logistics platforms (GoGoX, Lalamove, etc.), construction contractors, travel agencies, schools, and private clients.
In survey and interview data, frontline drivers commonly expressed that what they find most unacceptable is not simply rising fuel prices, but rather "not understanding why prices rise so quickly and fall so slowly," and "not seeing clear responsibility-sharing and information accountability between platforms, oil companies, and the government."
1.3 Key Data Analysis
1.3.1 Fuel Expenditure & Income Ratio
The survey reveals devastating impact of fuel price increases on drivers' livelihoods:
| Fuel as % of Income | Count | Percentage |
|---|---|---|
| Over 30% | 323 | 53.7% |
| 20%-30% | 203 | 33.7% |
| 10%-20% | 71 | 11.8% |
| Total over 20% | 526 | 87.4% |
| Monthly Income Reduction | Count | Percentage |
|---|---|---|
| Reduced by over HK$10,000 | 163 | 27.1% |
| Reduced by HK$5,000-$10,000 | 329 | 54.7% |
| Reduced by under HK$5,000 | 109 | 18.1% |
| Significant decline (over HK$5,000) | 492 | 81.7% |
"Currently, filling 38 litres of fuel costs about HK$430 after discount (about HK$11.3 per litre). Previously, the same amount could fill 52 litres (about HK$8.3 per litre). Monthly fuel expenses have increased by 30% to 50%. I have to open windows instead of using air conditioning to save fuel, working 10-12 hours a day, 7 days a week, almost without a single day off all year." β Light van driver
A small delivery company owner revealed that monthly fuel costs soared from HK$10,000-$15,000 to nearly HK$30,000-$35,000, an increase of over 100%, accounting for nearly 20% of revenue.
1.3.2 Drivers' Extreme Self-Help & Health Costs
Drivers have been forced to take extreme actions to offset fuel prices:
Data shows drivers have exhausted their self-help capacity:
When an industry needs to rely on "extending working hours" to maintain income, it demonstrates that cost pressure has exceeded normal absorption capacity. This approach of offsetting costs through overtime is unsustainable.
"We've pushed extra trips to the limit β we're using our health and time to absorb the fuel costs." β Driver community "Cargo Van & Truck 9 Flow Flow"
1.3.3 Platform Support & Government Oversight Ratings
Both platforms and government oversight received near-rock-bottom ratings β drivers overwhelmingly feel abandoned by both the commercial platforms they work with and the regulatory bodies meant to protect them.
"As soon as fuel prices rise, platforms immediately cut unit prices and compress compensation, while drivers can only save fuel and work overtime. This is a vicious cycle β drivers have no bargaining power and can only absorb costs through overtime."
As a significant proportion of drivers rely on platforms for orders, if fuel costs rise while freight rates or surcharges fail to adjust accordingly, frontline drivers easily face a situation of "bearing costs themselves while unable to increase income." From a policy perspective, this highlights the necessity of establishing clearer, more predictable fuel surcharge or cost-sharing arrangements.
1.4 Drivers' Most Urgent Demands
Among 602 valid responses, supported policy measures were distributed as follows (multi-select):
| Supported Measure | Mentions | Percentage |
|---|---|---|
| Reduce/waive commercial vehicle licence fees or tunnel fees | 487 | 80.9% |
| Government short-term fuel subsidy | 485 | 80.6% |
| Require oil companies to submit price-increase reasons for government approval | 458 | 76.1% |
| Platforms or employers to add fuel surcharge immediately | 415 | 68.9% |
| Other opinions | 28 | 4.7% |
Notably, all four leading demands received support from over 68% of respondents β indicating drivers want a multi-pronged response rather than a single fix. The strongest demand is for direct cost relief (licence/tunnel fee cuts and fuel subsidies), closely followed by structural reform (regulatory oversight of pricing and platform-side surcharges).
Chapter 2: Frontline Voices β Driver Community Testimonies
Key Points
- Drivers describe the daily reality of "quick to rise, slow to fall" β backed by 74.1% reporting fuel cost increases over 50%
- Platforms transfer costs to drivers, forcing them to "pay to volunteer" β platform support rated only 1.5/10
- National security angle: 80% of HK fuel from Mainland, yet prices differ threefold; 76.1% of drivers demand government price-hike approval
The opinions of local driver groups reflect the most authentic anger and helplessness on the frontline. Below are representative statements, each corroborated by quantitative findings from our 602-respondent survey.
The Daily Struggle of "Quick to Rise, Slow to Fall"
"When international oil prices drop, we have to wait weeks for a reduction of just a few cents; when they rise, petrol stations increase prices the very next day. This 'quick to rise, slow to fall' situation is something we experience every single day."
Platform Cost Transfer
"As soon as fuel prices rise, platforms immediately cut unit prices and compress compensation, while drivers can only save fuel and work overtime. This is a vicious cycle β we're paying out of pocket to volunteer. Existing measures are ineffective, order volumes are insufficient, and cross-harbour orders result in losses."
National Security Perspective
"80% of Hong Kong's fuel is supplied by the Mainland β why can there be a threefold price difference? The government should take decisive action on livelihood issues and lower fuel prices. That is true national security. Mainland officials have also directed oil companies to reduce prices."
Chapter 3: Hong Kong Fuel Market Structure & Issues
Key Points
- Five oil majors dominate with extremely high barriers to entry
- "Quick to rise, slow to fall" with parallel pricing raises transparency concerns
- Legal enforcement is difficult; regulation lacks binding power
- Singapore and Australia far exceed HK in fuel price transparency
3.1 Oligopoly & High Barriers to Entry
Hong Kong's vehicle fuel market is dominated by five major retailers: ExxonMobil, Shell, Chevron, Sinopec, and PetroChina.
- Entry Barriers: Lack of petrol station land and limited terminal storage facilities (e.g. key locations in Tsing Yi) make it difficult for new operators to enter
- Limited Product Choice: The market primarily supplies 98-octane petrol, lacking cheaper 95-octane options, limiting consumer bargaining power
- Vertical Integration: Oil companies control the entire chain from import, storage, transport to retail, forming a "one-stop" monopoly
3.2 "Quick to Rise, Slow to Fall" & Parallel Pricing
- Parallel Pricing: Oil companies frequently maintain identical listed prices. While the Competition Commission considers "price uniformity alone insufficient to prove collusion," public questions about transparency have never ceased
- Adjustment Lag: When international oil prices fall, local retail prices decline slowly; when they rise, adjustments are made swiftly
3.3 Legal & Regulatory Gaps
- Passive Regulation: The Environment and Ecology Bureau only monitors import and retail price trends, lacking substantive binding power, failing to effectively address the "quick to rise, slow to fall" phenomenon
- Burden of Proof: The Competition Commission must prove the existence of an "agreement" or "concerted practice" to enforce the law β mere price convergence is difficult to prosecute
- Cost Transparency Deficiencies: Oil companies may not disclose cost composition, profit margins, or calculation details, preventing the public from judging whether pricing is reasonable
3.4 Why the Current Fuel Price Mechanism Is Considered Non-Transparent
The transparency of Hong Kong's fuel price mechanism has long been questioned. Currently, oil companies have no statutory obligation to disclose detailed cost structures, including crude oil procurement prices, refining costs, transportation and storage costs, land and operating expenses, and reasonable profit margins. Although government departments monitor import and retail price trends, there is no mandatory disclosure mechanism, nor regular independent audits or public reporting requirements.
When international oil prices rise, local retail prices tend to follow quickly; but when international oil prices fall, retail prices are notably slow to decline. Oil companies have not provided publicly verifiable adjustment bases and data support, resulting in the persistent "quick to rise, slow to fall" phenomenon, making it difficult for the public to judge whether price changes are reasonable.
If Hong Kong could reference these practices to establish clear price adjustment formulae, periodic cost disclosure systems, and third-party verification mechanisms, it would help enhance public confidence and provide a more solid data foundation for policy formulation.
Chapter 4: International Regulatory Models
Key Points
- Vietnam: stabilisation fund triggers automatically at Β±3% price swing
- Utility model: 8-12% profit cap with mandatory cost disclosure
- Mainland China: government-led pricing with upper/lower limits
- Singapore & South Korea: market-based + tax/fund adjustments
In an era of global oil price volatility, many countries have taken proactive measures to protect consumers and grassroots industries. Below are international best practices:
4.1 Vietnam Model: Fuel Price Stabilisation Fund
- Buffer mechanism automatically activates when international oil prices fluctuate beyond ±3%
- Fund subsidises the public when prices are high; surcharges replenish the fund when prices are low
- Effectively mitigates the direct impact of oil price volatility on people's livelihoods
4.2 Utility Regulation Model
- Set reasonable profit rate caps (e.g. 8-12%) to prevent excess profits
- Price adjustment approval system: major adjustments require 30-day advance application with cost evidence
- Transparency requirements: mandatory disclosure of cost structure and profit breakdown with third-party audit
- Regular review mechanism: "Fuel Price Review Committee" comprising government officials, industry, academics, and consumers
4.3 Mainland China Model: Government-Led Regulation
- Pricing mechanism linked to international oil prices but with regulated upper and lower limits
- When increases are too large, the government reduces the adjustment to stabilise prices
- Case study: On 7 April 2026, the planned increase of 800 yuan/tonne was actually only adjusted to 420 yuan/tonne β demonstrating the government's precise regulatory capability
4.4 Singapore Model: Market-Based + Tax Regulation
- Fully market-based pricing with oil companies setting their own prices
- Consumption tax adjustments to stabilise retail prices
- Mandatory disclosure of retail price composition
4.5 South Korea Model: Partial Regulation + Oil Price Fund
- Dedicated fund established to respond to price fluctuations
- Fuel tax rates adjusted based on international oil price movements
- Targeted subsidies for specific industries (transport, logistics)
Chapter 5: Long-term Reform Proposals
Key Points
- Introduce a fare adjustment mechanism based on MOPS + local cost index
- Establish a fuel price stabilisation fund: HK$5β10 billion seed capital
- Seek Central Government support: state-owned oil firms to lead 10% price cut
- Market reform: introduce 95-octane petrol, open infrastructure access
5.1 Introduce a "Fare Adjustment Mechanism"
Referencing Hong Kong's public transport fare adjustment models (such as MTR and franchised buses), transforming the current "black box model" into a data-driven "rule-based model":
Establish a Transparent Adjustment Formula
| Parameter | Description | Recommended Weight |
|---|---|---|
| ΔP | Retail price adjustment percentage | β |
| ΔMOPS (w1) | Singapore Platts product oil price change (HK import benchmark) | 70%-80% |
| ΔLCI (w2) | Local operating cost index change | 20%-30% |
| X | Productivity factor (forcing oil companies to improve efficiency and return value to consumers) | β |
Adjustment Frequency & Thresholds
- Frequency: Quarterly review (January, April, July, October)
- Threshold: Calculated change must exceed ±1.5% to trigger adjustment
- Cap Mechanism: Annual maximum increase must not exceed 1.5 times the inflation rate
Profit Linkage & Transparency
- If oil company annual profit exceeds 15% return on equity, next quarter's increase is automatically reduced
- Oil companies must submit audited cost data to the "Fuel Price Review Committee"
5.2 Establish a "Fuel Price Stabilisation Fund"
Funding Sources
- Excess Profit Tax / Windfall Tax: Additional tax collected when oil company profits exceed "reasonable levels"
- Low-Price Accumulation: When international oil prices fall below the "baseline," HK$0.5-$1 per litre is diverted to the fund
- Government Allocation: Initial seed fund injection (recommended HK$5-10 billion)
Operating Model
- Subsidy automatically activates when weekly international oil price changes exceed ±5%
- Fund covers 50% of the increase; the remainder borne by oil companies and consumers
- Dedicated subsidy channel for commercial vehicles through fuel cards with instant discounts
5.3 Seek Central Government Assistance
The report recommends that the SAR Government liaise with the Central Government to direct Chinese state-owned oil companies operating in Hong Kong to take the lead in reducing prices, using market mechanisms to compel other oil companies to follow suit, thereby easing the burden on drivers.
- Negotiate with the Central Government's Hong Kong and Macao Affairs Office to direct PetroChina and Sinopec to reduce prices by at least 10%, taking the lead in reducing prices
- Position the price leadership as state-owned enterprises' care and support for Hong Kong's livelihood
- Through market adjustment, compel other oil companies to follow with price reductions; SOE price leadership forces other oil companies to follow, creating healthy competition
- Central leadership has repeatedly emphasised caring for Hong Kong residents' lives; leading fuel price reductions aligns with leadership directives
5.4 Market Structure Reform
- Introduce 95-Octane Petrol: Mandate oil companies to offer more economical options
- Optimise Petrol Station Tendering: Introduce innovative mechanisms such as "super tenders" to lower entry costs for new operators
- Open Infrastructure: Explore opening terminal storage facilities to all operators
5.5 Targeted Support & Tax Reform
- Fuel Tax Rebate: Provide fuel tax rebates or dedicated subsidies for professional drivers
- EV Conversion Subsidies: Strengthen the "New Energy Transport Fund" and improve charging infrastructure
- Dynamic Tax Rate Mechanism: Implement temporary tax relief (3-6 months) during extreme high prices
Chapter 6: Media Coverage & Public Attention
Key Points
- Front-page coverage by Oriental Daily, on.cc, HK01 and other outlets
- Driver case studies: monthly fuel costs up 50-100%
- Growing public attention and rising calls for policy reform
The Group's advocacy has received in-depth coverage from multiple media outlets, fully demonstrating the severity of the issue and widespread public concern:
Oriental Daily β A1 Front Page (23 Mar 2026)
"War Drives Up Fuel Costs, Self-Employed Drivers Call for Help" β Driver Samuel's monthly fuel expenses increased by 50%, working year-round without a day off. Small delivery company owner Cow revealed fuel costs increased by over 100%
Read full article →on.cc (22 Mar 2026)
"High Fuel Prices Impact Freight Industry Livelihood, Organisation Urges Government to Waive Tunnel Fees" β Coverage of driver hardship and policy proposals
Read full article →HK01 (23 Mar 2026)
"Fuel Prices Doubled in Half a Month, Drivers Under Mounting Pressure β Can the Government Intervene Immediately?" β In-depth analysis of policy causes and reform directions
Read full article →Building Voice Machine β Facebook (22 Mar 2026)
"Fuel Prices Doubled in Half a Month, Drivers Under Mounting Pressure" β Feature report on the devastating impact on driver livelihoods
Read full article →Oriental Daily (23 Mar 2026)
"Vehicle Owners Distressed, Urge Fuel Subsidies and Tunnel Fee Reductions"
Read full article →Latest Updates & Media Links
Latest developments and media coverage following the release of this report:
-
16 April 2026Research report officially published β Read full report
This section will be continuously updated with the latest media coverage and developments.
References
Government & Regulatory Documents
- Hong Kong Competition Commission β Auto-fuel Market Study Report (2025)
- Hong Kong Competition Commission β Competition Ordinance (Cap. 619)
- Environment and Ecology Bureau β Fuel Price Monitoring & Energy Policy
- Hong Kong Legislative Council β Panel on Environmental Affairs Discussion Papers
International References
- S&P Global Commodity Insights β Platts Refined Product Benchmark Prices (Singapore MOPS)
- Australian Competition and Consumer Commission (ACCC) β Petrol Industry Reports
- Vietnam Ministry of Industry and Trade β Fuel Price Stabilisation Fund Mechanism
- Korea Energy Economics Institute (KEEI) β Oil Price Fund & Tax Rate Adjustment Policies
- National Development and Reform Commission, China β Refined Oil Price Adjustment Mechanism
Media Coverage
- Oriental Daily (2026.03.23) β "Unending Conflict, Expensive Fuel β Self-Employed Drivers Seek Help"
- on.cc (2026.03.22) β "High Fuel Prices Impact Freight Industry Livelihoods"
- HK01 (2026.03.23) β "Fuel Prices Doubled in Half a Month"
- Lausengkei Facebook (2026.03.22) β "Fuel Prices Doubled, Drivers Under Pressure"
- Oriental Daily (2026.03.23) β "Vehicle Owners in Distress β Calls for Fuel Subsidies"
Conclusion
Hong Kong's fuel price issue is no longer merely a matter of market fluctuation but a structural crisis involving livelihood stability and social fairness. Commercial vehicle drivers (especially light van and logistics platform drivers) face enormous survival pressure, forced to absorb high fuel prices with their "health and time." International experience proves that moderate government regulation and market structural reform are both feasible and effective.
We urge the government to immediately adopt the recommendations in this report, pursuing both short-term relief and long-term mechanism reform:
Short-term (within 6 months)
Launch direct fuel subsidies for commercial vehicles; reduce or waive licence and tunnel fees; initiate the "Fuel Price Stabilisation Fund"
Medium-term (1-2 years)
Establish a "fare adjustment approval mechanism" to improve pricing transparency; seek central government assistance to push SOEs to lead price reductions; gradually open market access and introduce competition
Long-term (2+ years)
Refine fuel tax and carbon emission linkage mechanisms; accelerate commercial EV transition; achieve full market competition and sustainable stability