Groups seek subsidies amid fuel cost pressure

The transport sector is  calling for government intervention and targeted subsidies as fuel prices continue to rise locally despite a recent decline in international oil prices, placing heavy pressure on operators and consumers.

The Macau Heavy Vehicle Drivers Union and the Macao Motor Car Mechanics Union held an emergency meeting recently to discuss the situation and urged the government to introduce measures to stabilise fuel costs.

According to the associations, diesel prices – previously generally below MOP16 per litre – have recently reached as high as MOP22 at some fuel stations, representing an increase of more than 37%.

They warned that the sustained increase in fuel costs is placing severe pressure on transport operators, many of whom are struggling to maintain stable operations.

The groups also noted that aviation and shipping sectors have already adjusted fuel surcharges, raising concerns that rising transport costs will eventually be passed on to consumers through higher prices.

The associations urged the government to strengthen oversight of fuel pricing and consider subsidy schemes similar to those implemented in neighbouring regions, including Hong Kong, to help cushion the impact on the industry and the public.

They said targeted support measures would help prevent further cost escalation and reduce the risk of broader inflationary pressure affecting household expenses.

Meanwhile, lawmaker Leong Sun Iok has called on the government to strengthen monitoring of fuel prices and consider targeted relief measures, warning that persistent “fast rises, slow falls” pricing patterns are adding to inflationary pressure on residents and businesses.

Leong said recent volatility in international crude oil futures – driven by heightened geopolitical tensions in the Middle East – has not been properly reflected in local retail fuel prices.

He noted that although global oil prices have declined recently, Macau’s retail prices for fuel and liquefied petroleum gas (LPG) have not followed suit. In some cases, they have even increased, raising public concerns over pricing transparency.

Citing official statistics, Leong pointed to a widening gap between import and retail prices. For example, LPG import costs averaged MOP7.44 per kilogram in 2022 during the Russia-Ukraine conflict, while retail prices rose to nearly MOP20 per kilogram. This year, import costs have fallen by nearly 25% to about MOP5.51 per kilogram, yet retail prices have increased to MOP21.76 per kilogram.

A similar trend, he said, can be seen in the fuel market. Prices for unleaded petrol and diesel have retreated by around 10% from their peak levels in 2022, but retail pump prices in Macau have instead climbed to MOP14.72 per litre and MOP16.29 per litre respectively.

Leong warned that fuel costs directly affect household spending and significantly increase transport, logistics, and business operating expenses, which are ultimately passed on to consumers through higher overall inflation.

He referenced Hong Kong’s planned short-term relief measures, which include a two-month subsidy of HKD3 per litre of diesel for commercial vehicles such as buses, trucks, and taxis, as well as a 50% toll reduction for tunnels, as examples of proactive policy support.

Leong urged local authorities not only to enhance price supervision to prevent unjustified increases by suppliers, but also to consider introducing targeted fuel subsidies or relief schemes for sectors most affected by price fluctuations, particularly the transport industry and small and medium-sized enterprises.

He said such measures would help ease operational pressure, stabilize costs, and reduce the broader impact of imported inflation on the local economy.

Leong also stressed that more proactive intervention would “be consistent with regional practices and would help ensure fairer pricing mechanisms, stronger market transparency, and better protection for public livelihoods amid ongoing external economic uncertainty.”