【Iran Crisis】New Oil Crisis at a Glance: How the Conflict Will Impact Your Wallet: Flight Surcharges Double, Daily Essentials Could Spike 20%!

The United States and Israel bomb Iran, prompting Iran to block the Strait of Hormuz, disrupting shipping routes. International oil prices surged sharply, with Brent crude futures rising from pre-war levels of around $70 to a peak of $119.4. The price increase quickly spread to the Hong Kong market, with retail gasoline prices exceeding HKD 30 per liter and airlines significantly raising fuel surcharges. The rising costs also affected various everyday consumer goods, food, and service expenses.

Aviation Industry

Cathay Pacific: Starting March 18, 2026, long-haul fuel surcharges will increase from HKD 569 to HKD 1,164, doubling.

• Short-haul flights (Japan, Korea, Thailand, Southeast Asia, Taiwan): from HKD 142 to HKD 290.
• Medium-haul flights (South Asia subcontinent): from HKD 264 to HKD 541.
• Long-haul flights (Southwest Pacific, North America, Europe, Middle East, Africa): from HKD 569 to HKD 1,164.
• Mainland China: remains at HKD 165.

*Cathay also updated cargo fuel surcharges: from March 1 to 19, short-haul is HKD 0.9 per kg, long-haul HKD 3.2 per kg; from March 20 to 31, short-haul increases to HKD 3.5 per kg, long-haul to HKD 12.9 per kg, more than doubling.

HK Express fuel surcharges, effective March 18, will add HKD 150 for all mainland routes.

• Between Hong Kong and other regions (excluding mainland China): from HKD 140 to HKD 290.
• Mainland China: remains at HKD 165.

Hong Kong Airlines: From March 12, surcharges for routes to Japan, Korea, and others will increase by approximately HKD 50 to HKD 212 per flight.

• Short-haul routes (Japan, Korea, Thailand, Southeast Asia, Taiwan): from HKD 162 to HKD 212.
• Long-haul routes (Australia, Canada): from HKD 589 to HKD 739.
• Maldives: from HKD 284 to HKD 384.
• Mainland China: from HKD 185 to HKD 190.

Greater Bay Airlines: Surcharges for flights to Thailand, Vietnam, and other destinations will double from March 18.

• Short-haul routes (Japan, Korea, Thailand, Southeast Asia, Taiwan): from HKD 142 to HKD 290.
• Maldives: from HKD 284 to HKD 541.
• Mainland China: remains at HKD 165.

Utilities (Electricity)

Due to rising fuel costs for power generation, experts expect CLP and HK Electric to increase their fuel adjustment charges starting next month.

Public Transport (Minibuses, Buses)

Diesel and LPG costs have increased by HKD 60 to HKD 100, prompting operators to plan fare hikes. The government stated it will review applications cautiously, balancing affordability for citizens.

Logistics and Courier Industry

Overall transportation costs are gradually being passed on to freight rates. Local courier services (e.g., SF Express Hong Kong and Macau local parcels) have added HKD 1 per shipment as fuel surcharge since March 16, directly impacting e-commerce sellers and frequent online shoppers.

Paper Manufacturing and Retail

Toilet paper and tissues, due to their large volume and thin profit margins, are experiencing direct cost increases from transportation. Retail prices for toilet paper and tissues are expected to rise by about 20% (e.g., a HKD 20 pack might increase by HKD 3-4). Once stockpiles are depleted, full price hikes are expected in April.

Cleaning and Personal Care Products

Detergents, dishwashing liquids, hand sanitizers, and other petroleum-derived products will see slight short-term adjustments due to rising raw material and transportation costs. If the conflict lasts over three months, increases will become more significant. The production cost of medical masks has already risen by 15% (with higher increases in fabric and packaging). Local manufacturers are temporarily absorbing some costs, but electricity and delivery expenses will ultimately be hard to fully offset.

Food Retail and Supermarkets

Nearly 90% of goods in Hong Kong are imported. Logistics costs have increased by 5% to 7%. Retail prices for mainland vegetables, rice, canned foods, and daily necessities are expected to rise by 5% to 15% in the short term, potentially reaching 20% in worst-case scenarios. Imported ingredients, especially high-end items like Wagyu beef and seafood, are under price pressure due to increased logistics costs (air fuel surcharges).

Fisheries and Seafood Supply Chain

Fuel accounts for about 40% to 50% of operating costs for fishing vessels. Approximately 20% of fishing boats have reduced their trips due to high fuel prices, leading to decreased catch volumes. Aquaculture fish can partially compensate, but overall seafood prices are expected to rise significantly. A new round of catch season price adjustments is already being considered.

Other imported bulk raw materials such as fertilizers and feed ingredients are also affected by higher transportation costs, further pushing up the prices of agricultural products and meats.

Home Renovation Materials and Construction Industry

Oil-based materials like paint, floor tiles, plastics, and fiberglass, combined with soaring transportation costs, will see prices adjusted. While existing inventories may buffer the impact temporarily, new projects are expected to see price increases starting next month, indirectly raising renovation costs.

Industry experts warn that with rising oil derivatives and logistics expenses, retail prices will gradually increase over the next one to three months. If the conflict eases in the short term, the impact may be limited to 5% to 10%; if it persists, the chain effect could extend to more imported goods.

In addition to direct price hikes, some daily necessities may adopt a “no discount but reduced quantity” approach to raise prices indirectly. The Hong Kong Consumer Council and industry groups urge citizens to maintain the habit of “buying only what you need” to avoid unnecessary stockpiling that could further drive prices up. Currently, supermarkets and pharmacies have not observed significant panic buying, and the overall supply chain remains stable.