Minister Lim Hng Kiang's reply to Parliament Questions on pump prices of gasoline

Question No. 549 of Notice Paper No. 68 of 2008

Name and Constituency of Member of Parliament
Er. Lee Bee Wah, Member for AngMo Kio GRC.

Question
To ask the Minister for Trade and Industry (a) if he can explain why pump prices of gasoline has risen when the US dollar has weakened against the Singapore dollar, and (b) whether his Ministry has been monitoring the rise in pump prices of gasoline to ensure that the oil companies are not profiteering.

Answer
My Ministry closely monitors the price of petrol, as part of our efforts to keep track of overall trends in inflation as well as to ensure that our key inputs and resources are competitively priced.

Petrol prices in Singapore are influenced by the combination of global oil prices in US dollars and the exchange rate between the Singapore dollar and the US dollar. Global oil prices have increased by 75% in US dollar terms during January 2007 to February 2008, and this has only been partly offset by the 8% appreciation of the Singapore dollar against the US dollar. Our petrol pump prices have increased on average by 35% in Singapore dollar terms. If the Singapore dollar had not strengthened against the US dollar, petrol pump prices would have increased even more.

Singapore is a price taker for fuel; we cannot influence global prices. Our best guard against excessive petrol price increases is to ensure that the retail market for petrol is competitive and we monitor this closely. We do not have any evidence of collusion among retail petrol companies. The Competition Commission of Singapore looks out for anti-competitive activities and stands ready to take decisive action in the event of such activities.