Er Dr Lee Bee Wah: To ask the Minister for Trade and Industry in light of the plunge in crude oil rates (a) whether current retail prices at petrol pumps reflect this trend; and (b) if not, whether the Ministry will implement measures to ensure petrol companies adjust prices accordingly.
Oral Answer by Senior Parliamentary Secretary for Trade and Industry Dr Tan Wu Meng
1. To get petrol at the pump, the crude oil has to be refined and processed. In addition to the cost of refining, there will also be operating costs, taxes, duties, andland costs on the one hand, as well as discounts and rebates on the other hand.
2. Between 2 January 2020 and 9 March 2020, the Brent crude price fell from 66 to 34 US dollars per barrel. If this price decrease was fully passed through, or in other words, mirrored in retail petrol prices, then retail petrol prices would havedropped by 26 Singapore cents per litre. The listed price of Octane 95 petrol fell by 20 cents per litre, with a slight lag of 6 days. This represents a pass-through of over three-quarters of the decrease in crude oil price. Based on an in-depth study on retail petrol prices conducted by the then-Competition Commission of Singapore in 2017, pass-through of around 70% for both price increases and decreases is typical.
3. Retail petrol prices are determined by the market. Well-informed consumers are a key deterrent against unreasonable pricing decisions. To help empower consumers, the Consumers Association of Singapore (CASE) has launched Fuel Kaki, a retail petrol price comparison website. Fuel Kaki helps consumers compare the effective prices of retail petrol, including various discounts and rebates. This is part of CASE’s overall efforts to empower consumers to make better informed decisions.
4. The Government will continue to ensure well functioning competitive markets, and empower consumers to make informed decisions.