Hong Kong’s laundry sector is facing an unprecedented crisis as the price of industrial diesel has more than tripled in just over a month. This surge in fuel costs is pushing many businesses to the brink of closure, forcing them to halt hiring and reject new orders. The situation is particularly dire for laundries serving critical sectors like hospitals and hotels, which rely heavily on diesel-powered equipment.
The dramatic increase in industrial diesel prices, attributed to heightened volatility stemming from the Middle East conflict, has sent shockwaves through Hong Kong’s laundry industry. Operators report that the cost of this essential fuel, used to power high-temperature steam boilers for washing and sterilization, has skyrocketed. For some companies, monthly diesel expenses have ballooned from over HK$1 million to more than HK$5 million, leading to projected significant financial losses.
Industry leaders warn that a substantial portion of laundry companies, potentially 20% to 30%, may be forced to shut down if the current trend continues. Many businesses are already implementing cost-saving measures such as freezing new hires and reducing operating hours. The inability to easily pass on these increased costs to clients, whose contracts are often secured through bidding processes with fixed prices, exacerbates the financial strain. Some operators are even dipping into personal funds to keep their plants operational.
Legislators have raised concerns about the crisis, urging the government to investigate the spike in duty-free industrial diesel prices. There are calls for suppliers to disclose cost justifications and profit breakdowns. The industry is seeking intervention to safeguard essential services relied upon by hospitals, hotels, and catering chains, highlighting the critical role these laundries play in the city’s infrastructure.