Huge gas lines have been reported in China this week, and Hong Kong residents are joining the logjams by rushing across the border to fill their tanks, as the threat looms of price increases or shortages from the Iran war.
The gas-hungry drivers were not overreacting based on mere rumors, as the Chinese government officially announced major price increases for fuel would take effect on Tuesday. Beijing sets floors and ceilings for gas prices, and on Tuesday it raised the ceiling for retail gasoline prices by a little over $100 per metric ton, the highest increase in four years.
China has rules about selling off existing retail inventories of gasoline before raising prices, so drivers knew they had only a few hours to fill up before higher prices kicked in.
Hong Kong residents pointed out that buying gas on the island tends to be about three times as expensive as filling up on the mainland, so the new price increases made it seem reasonable to drive to the adjacent mainland province of Guangzhou and sit in line for hours. Combined with another price hike in February, Hong Kong’s prices at the pump have increased by up to 50 percent so far this year.
Chinese social media platforms were brimming with frustrated Hong Kong drivers who came to regret that decision, as they found gas stations in Guangzhou running out of regular gasoline and selling only premium mixtures, or even running out of gas entirely.
Commercial vehicles in Hong Kong are not allowed to drive across the border to get fuel, but private vehicles are. Ringo Lee Yiu-pui of the Hong Kong China Automobile Association (HKCAA) warned the Hong Kong Standard that the soaring cost of diesel fuel in Hong Kong could make shipping and public transportation unaffordable, unless the mainland government relented on the “unreasonable” tariffs it imposes on fuel deliveries to the island.
The price of commercial fuel in Hong Kong has gotten so high that truck drivers are attempting to defy the ban on cross-border purchases, only to be intercepted by customs officials.
“In the past few weeks, we have uncovered many such cases involving cars that had enlarged their fuel tank capacity and made other modifications,” customs commissioner Chan Tsz-tat told the South China Morning Post (SCMP) on Wednesday.
“These vehicles have been seized by customs, and we will apply to the court for their confiscation as well,” he said.
The HKCAA’s Lee warned that more motorists would seek “illegal options” if Hong Kong prices continue to explode beyond China’s rising fuel costs, because the economic incentives for criminal activity have become so attractive. Some of those illegal options include back-alley gas purchases from black marketeers that could include unsafe fuel handling.
“When this untaxed petrol is being filled into vehicles, there is an extremely high risk of fire. This not only creates a very dangerous situation for the vehicle involved but also for the surrounding neighborhood,” warned Commissioner Chan.
Industry analysts told the SCMP that higher fuel costs were already eating into the profits for truckers, and they would soon have little choice but to pass those costs along to consumers.
