SINGAPORE: Authorities will monitor and take action if there is evidence of “anti-competitive activity” among petrol retailers in Singapore, said Senior Parliamentary Secretary for Trade and Industry Tan Wu Meng in Parliament on Tuesday (May 26).
He was responding to a parliamentary question by Member of Parliament Ang Wei Neng, who asked if oil companies in Singapore behave like an oligopoly and if the Ministry of Trade and Industry (MTI) would mandate oil companies to publish their lowest petrol and diesel prices after their best discounts.
"Oligopoly is a market structure where there are only a few providers in the market. Partly due to Singapore’s relatively small market, an oligopolistic-type structure can be found in several sectors, including supermarkets and cinemas," Dr Tan explained.
"Harm can arise if there is anti-competitive behaviour among the firms, for example collusion to mark-up prices."
Dr Tan noted that a 2017 study by the then-Competition Commission of Singapore found that refined petrol costs accounted for less than one-third of the listed retail petrol price.
Major petrol retailers regularly monitor and respond to each other prices and promotions, but that prices do not always "move in tandem" along petrol retailers, the senior parliamentary secretary said.
"Furthermore, there was no observable pricing pattern, such as a clear price leader, either for price increases or price decreases. The Competition and Consumer Commission of Singapore (CCCS) is monitoring closely and will take enforcement action should evidence of anti-competitive activity surface," Dr Tan said.
Mr Ang asked in a supplementary question if MTI would consider introducing more competition into the petroleum market to “silence the criticism” that major oil companies are profiteering.
Dr Tan said that the 2017 study found a “lack of ready access and awareness” of retail petrol prices among consumers, which prompted the development of the Fuel Kaki website to “improve transparency for petrol prices”.
As listed pump prices can be different from what consumers eventually pay after discounts and rebates, consumers can use the website’s price estimator to find out which petrol retailer offers the lowest effective price based on their individual eligibility, he said.
“Well-informed consumers are a key deterrent against unreasonable pricing, and we will continue to work to improve Fuel Kaki and to continue empowering all our consumers," said Dr Tan.
Empirical evidence does not suggest that listed retail petrol prices adjust downward at the same rate and amount as upward price adjustments, added Dr Tan.
The 2017 report found that between January 2010 and December 2016, for every 10-cent change in the Mean of Platts price in Singapore, which is the pricing basis for many refined products, retail petrol price changed by an average of 7 cents. This applied to both price increases and decreases.
On average, retailers took eight days to adjust their prices when the Mean of Platts price increased, and six days to adjust their prices when the Mean of Platts price decreased, he added.