Question "LCQ12: Land premium for petrol filling station sites'" by the Hon Lau Kong-wah and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council

 

Following is a question by the Hon Lau Kong-wah and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council today (November 3):

 

Question:

 

Regarding the land premium for petrol filling station sites, will the Government inform this Council:

 

(a) of the average per-square-metre premium of leases granted in each of the past five years by the authorities for land used as petrol filling station;

 

(b) whether it has looked into how land premium for petrol filling station sites affects the retail prices of motor vehicle fuel; if it has, of the findings; and

 

(c) whether it will consider providing premium waiver in granting new land leases for petrol filling station sites as a means of lowering the fuel prices for motor vehicles?

 

Reply:

 

President,

 

My reply to the three-part question is as follows:

 

(a) Land for petrol filling stations (PFS) are sold to PFS operators by way of tender to the highest bidders. Land premium for such land is determined by market forces. Bid prices are determined by tenderers taking into account various factors such as location of sites, traffic throughput of nearby roads, accessibility for motorists, whether any new operators are keen to enter into the Hong Kong market etc. On this basis, we must emphasize that comparing the average land premium of land for PFS per square metre on average would not provide any useful information for reference.

 

From 2000 to 2002, there were no tenders of land for PFS. In 2003, four sites for use as PFS were sold, with a premium of $29,000 per square metre on average. In 2004, 10 sites were sold, with a premium of $58,000 per square metre on average.

 

(b) Retail price of oil products is determined by various factors, including import price of the product, market condition, mode of operation, marketing strategy and operating cost (including land premium and rent of PFS) of individual companies. It is difficult to assess the impact of any one factor on the retail price.

 

(c) PFS sites have all along been awarded through open tender with premium determined by the market. It would not be fair to operators who have obtained PFS sites in previous tenders, if premium waiver is granted for new sites.

 

Ends/Wednesday, November 3, 2004

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