What are the impacts of increasing traffic between Mainland China and Hong Kong?
A direct impact is a reduction of fuel demand in Hong Kong as Mainland fuel prices are lower than those of Hong Kong. Unlike Hong Kong, where prices are subject to market conditions, fuel prices in the Mainland are regulated by the government. They are also significantly cheaper than Hong Kong because of the Mainland’s duty-free fuel policy and its lower-standard fuel specification (e.g. sulphur content in Mainland diesel can be 40 times higher than in Hong Kong). The lower price in Mainland China has become an attractive pull for both commercial and private drivers. The result is a significant reduction of fuel demand in Hong Kong. However, the lower-quality fuel with its higher emissions also contributes to poorer air quality in Hong Kong.
