Hongkongers are suffering as oil prices spike. There’s a better way to help them.

2026-03-21 - 03:12

I have sympathy for people who rely on fuel for their living. Truckers, cabbies and drivers have all had their costs increased because of the hateful and unnecessary war in Iran. Hong Kong lawmakers have asked the government to intervene, subsidising fuel costs during the price spike to help them through the rough patch. A petrol station in Hong Kong on March 13, 2026. Photo: Kyle Lam/HKFP. I completely agree with the sentiment. If people are struggling because of events outside of their sphere of influence, the government should help. Fossil fuel supplies get disrupted regularly. Geopolitics caused oil prices to spike in 1973, 1979, 1990, 2011, 2022, and, of course, now in 2026. As much as I hate to predict more human misery, it’s likely to happen again. So, at the risk of sounding like the worst kind of heartless arch-capitalist, it’s worth asking if being exposed to oil price spikes is, in fact, outside of people’s sphere of influence. Some large fuel consumers, like airlines, can use sophisticated financial instruments to hedge their fuel costs. However, they are still exposed to the vagaries of the oil market, as we can see by the incoming fuel surcharges. Smaller companies or individuals who don’t have access to sophisticated financial hedges have only the recourse of trying to consume less fuel. In the past, the only way to achieve that was to invest in more fuel-efficient engines; today, the alternative is to electrify. Anyone who buys a petrol or diesel vehicle today knows that they are handcuffing themselves to needing fuel supplies in the future. There’s enough information out there about the volatility of fuels, about the efficiency of electric motors, and yes, about climate change, that anyone who makes that decision does so with their eyes wide open. I don’t want to be unsympathetic. I know it’s a tough decision to pay the higher upfront costs for more fuel-efficient engines or even electric vehicles. It also seems inhumane to penalise people for decisions made several years ago, some of whom even made the sustainability-inflected choice to continue using an old vehicle instead of scrapping something serviceable in favour of a flashy new green model. Instead of using government funds to subsidise the continued reliance of outdated technology, wouldn’t it make sense to use government funds to subsidise people away from fossil fuels? An electric car in Hong Kong. File photo: Rutger van der Maar, via Flickr CC2.0. The recent budget has ended the first-time electric car tax reduction. There’s no longer a sweetener for people who make the sensible decision to avoid handcuffing themselves to fossil fuels. Subsidising petrol when prices spike instead gives that tax-funded sweetener to people who choose not to make that same decision. That’s a perverse incentive. Outside of the moral hazard of subsidising poor decisions, there’s the longer-term consideration. Climate change will be expensive. It will destroy property with rising sea levels and more extreme weather; it will make food more expensive as crops are affected by disrupted weather; it will make pandemics worse as disease-carrying animals and insects more frequently come into contact with humans. The Paris Agreement sets out a pathway to avoid the worst of that: reduce greenhouse gas emissions to net zero by 2050, with an interim target of cutting them in half by 2030. That is less than five years. Vehicles typically last longer than that, so any cars purchased today will still be pumping out greenhouse gases then. Making the move to net zero will require a lot of work. Building out the necessary charging infrastructure, building new power plants, and a robust grid with batteries and other storage will require money. But don’t think of it as expensive – think of it as an investment. We don’t have to look far for inspiration on how that investment can be done. China is proceeding apace in electrifying its economy – not just with electric vehicles, but with its power supply and even its heavy industry. The investment is already paying dividends: the increasing proportion of electric vehicles, powered increasingly by cheap solar panels and wind, helped to insulate it somewhat from the oil price spikes caused by the Iran war. The Iran war is causing misery, not just for the innocent people trapped in the war zone, but also for the innocent people whose costs are going up as a result of the disruption to fuel supply. It’s inhumane not to offer help to people who are trapped by these higher costs, and in that respect, I agree with the lawmakers who want to use government funding to ease that pain. But let’s do it smartly. Instead of using sticking-plaster solutions like fuel subsidies, let’s help people in the long term. HKFP is an impartial platform & does not necessarily share the views of opinion writers or advertisers. 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