Price of 95-octane quality petrol down by 20 cents a litre amid oil value plunge
25 March, 2020
As global oil rates plunged amid a cost war between top suppliers Saudi Arabia and Russia, the cost of the most famous 95-octane quality petrol at pump stations in Singapore has fallen by 20 cents a litre.
Since there is “hook lag” of six days, this represents a “pass-through of in excess of three-quarters of the lower” 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 essential oil market share just after their three-year offer to restrain productivity collapsed in early March. Global oil prices have plunged with their lowest amounts in years since that time.
Between Jan 2 and Mar 9, the cost of Brent crude fell from US$66 to US$34 per barrel, explained Dr Tan.
“If this price lower was fully passed through, or in other words, mirrored in retail petrol prices, then retail petrol prices could have dropped by 26 Singapore cents per litre.
“The listed price of octane 95 petrol fell by 20 cents per litre, with hook lag of six times,” he said.
The pass-through of around 70 % for both price increases and reduces is “typical” predicated on a 2017 study on retail petrol prices conducted by the then-Competition Commission of Singapore, he added.
Dr Tan was giving an answer to a query from Person in Parliament Lee Bee Wah if pump petrol rates have reflected the fall found in crude oil prices and if not, if the ministry would implement methods to make sure petrol companies adapt their prices accordingly.
“To get petrol at the pump, the crude oil must be refined and processed,” he told the home.
“Found in addition to the price tag on refining, there may also be operating costs, taxes, obligations, and territory costs on the main one hand, and rebates and discounts however.”
While retail petrol prices are dependant on the market, well-informed individuals are a “key deterrent” against unreasonable prices decisions, said Dr Tan.
The Customers Association of Singapore has launched Gasoline Kaki, a retail petrol price comparison website, as part of its efforts to empower consumers.
“The Federal government will continue steadily to ensure well-functioning competitive market segments and empower consumers to make informed decisions,” he said.
Source: www.channelnewsasia.com
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