More Transparency for Petrol Prices in Singapore

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Complaints have been ongoing as to why petrol prices have not lowered when crude oil prices fall and no official response has been given. Motorists have tolerated confusing petrol prices in relation to crude oil prices for years on end. It is high time that there is more transparency for petrol prices

At 9:40pm on 21 April 2020, a barrel of West Texas Intermediate (WTI) crude hit a new low of US$1.69 (S$2.40) while Brent crude was at US$25.92 (S$36.80). 

The Straits Times posted saying, “According to Fuel Kaki, a Consumers Association of Singapore portal that tracks fuel prices, a litre of 92-octane and 95-octane petrol is listed at $2.05 and $2.09 respectively across all brands.”

These prices have remained the same with little change since 25 March 2020 even when WTI was around US$20 (S$28.40) and Brent was around US$26 (S$36.92). Undoubtedly, these petrol prices look completely off. 

Petrol prices should be given as much attention as sectors such as general merchandise retail and air ticketing. These sectors are required to abide by strict laws on being transparent about their displayed prices. Meanwhile, petrol firms are not tied to the same level of transparency.

Over the years, petrol prices have been immune to immediate changes when crude oil prices dip. However, when it hikes, pump prices are raised almost immediately.

The Competition Commission of Singapore has said to have found “no significant” difference in the speed of change whether prices increase or decrease. However, significance is a subjective form of measurement. 

Generally, the explanation for stiff petrol prices would be that the calculations involve not only crude oil prices but also, taxes, administration, storage, transportation, marketing and so on. Hence, we are to believe that the price of petrol in Singapore is largely made up of the cost of these other factors. 

This could make sense, but when crude oil prices increase, retail pump prices do as well, as if the hike is reflected immediately. This would mean that crude oil prices do play a significant factor. 

However, there is a blunt difference when crude oil prices move up and down as the Straits Times mentioned, “Dr Tan also cited a study on petrol prices in 2017 by the then Competition Commission of Singapore. It found that, on average, petrol prices took longer to go up when crude prices increased, compared with cuts when crude oil prices fell.”

Furthermore, the editor of Torque magazine, Mr Jeremy Chua even said: “There is no transparency in the pricing of petrol and diesel in Singapore. This is why time and time again, consumers accuse oil companies of collusion and cartel-like behaviour.”

"Until transparent pricing is mandated, these accusations will continue."

We want transparency and honesty in this industry and would greatly appreciate an explanation and possibly have actions taken to subdue this issue that motorists have been fighting against for countless years. We hope the authorities can shed some light on this matter so that we can stop frustrating ourselves over petrol prices.

Resources: 

The Straits Times, 13 March 2020: 
The Straits Times, 4 April 2020: 
The Straits Times, 22 April 2020: