SINGAPORE: As global oil prices plunged amid a price war between top producers Saudi Arabia and Russia, the price of the most popular 95-octane grade petrol at pump stations in Singapore has fallen by 20 cents a litre.
While there is “a slight lag” of six days, this represents a “pass-through of over three-quarters of the decrease” in international crude oil prices, said Senior Parliamentary Secretary for Trade and Industry Tan Wu Meng on Wednesday (Mar 25).
Saudi Arabia and Russia became locked in a war for global oil market share after their three-year deal to restrain output collapsed in early March. Global oil prices have plunged to their lowest levels in years since then.
Between Jan 2 and Mar 9, the price of Brent crude fell from US$66 to US$34 per barrel, said Dr Tan.
“If this price decrease was fully passed through, or in other words, mirrored in retail petrol prices, then retail petrol prices would have dropped by 26 Singapore cents per litre.
“The listed price of octane 95 petrol fell by 20 cents per litre, with a slight lag of six days,” he said.
The pass-through of around 70 per cent for both price increases and decreases is “typical” based on a 2017 study on retail petrol prices conducted by the then-Competition Commission of Singapore, he added.
Dr Tan was responding to a question from Member of Parliament Lee Bee Wah if pump petrol prices have reflected the fall in crude oil prices and if not, whether the ministry would implement measures to ensure petrol companies adjust their prices accordingly.
“To get petrol at the pump, the crude oil has to be refined and processed,” he told the House.
“In addition to the cost of refining, there will also be operating costs, taxes, duties, and land costs on the one hand, as well as rebates and discounts on the other hand.”
While retail petrol prices are determined by the market, well-informed consumers are a “key deterrent” against unreasonable pricing decisions, said Dr Tan.
The Consumers Association of Singapore has launched Fuel Kaki, a retail petrol price comparison website, as part of its efforts to empower consumers.
“The Government will continue to ensure well-functioning competitive markets and empower consumers to make informed decisions,” he said.