Chee Hong Tat on managing volatility in COE supply and demand

More Certificates of Entitlement (COEs) will be brought forward from periods of high supply to stabilise times where fewer COEs are available as part of the Government’s “cut-and-fill” approach in managing supply and demand. Acting Transport Minister Chee Hong Tat pointed out that this approach aims to reduce the volatile swings of COE prices. He said the Government will ensure that the supply of COEs in the upcoming quarters will continue to increase in 2024 till the peak supply years in 2026 and 2027. “With the increase in supply, we hope that COE prices would moderate,” he said. Hence, there is “no need to rush”, he added. Replying to MPs’ questions in Parliament on Monday (Nov 6), Mr Chee said the Land Transport Authority (LTA) has started a review of the industry structure and regulatory framework for point-to-point providers to ensure that services stay relevant and are able to meet evolving commuter needs. It will study if there are further options beyond the COE bidding system to address the concerns of car leasing companies. The Government has a suite of measures in place to discourage speculation and will continue to closely monitor the COE market to detect speculative behaviour. If necessary, it will introduce further measures to discourage such behaviour. The Government will also take enforcement action against dealers who make false claims or misleading representations to consumers. Mr Chee added that the Ministry of Transport and LTA are doing what they can to address the concerns with the rise in COE premiums. They will continue to closely monitor and explore ideas to improve the situation. Mr Chee stressed that Singapore’s policy of zero-growth in the vehicle population remains relevant and the COE system is one of the policy measures supporting this goal.