Diesel also down as mini war sees prices cut for 12th time since July
By
Christopher Tan, Senior Correspondent
PUMP prices dipped yesterday - the 12th time since July - in a mini price war triggered by oil giant Shell's move to bring prices six cents down in response to its rivals' five-cent cut on Monday.
Shell also upped the ante by cutting seven cents off diesel rates - two cents more than the industry's five-cent reduction on Monday.
HITTING THE ROAD AGAIN?
'I've been commuting by train. But I may consider driving to work now. The roads are less congested and there are more carpark spaces available.' Headhunter Adrian Choo, in response to the falling fuel prices
And because the other firms did not want to lose out, they responded by matching Shell's rates.
By around noon, prices of 92-, 95- and 98-octane petrol were a uniform $1.703, $1.736 and $1.81 a litre, respectively, before discount.
The ultra-premium petrol - Shell's V-Power and Caltex's Platinum - are now at $1.939 and $1.936, respectively. And diesel now costs $1.483 a litre.
This latest cut brings the cost of motoring back to mid-2007 levels.
Based on today's 92-octane prices, an owner of a 1.6-litre Japanese car will spend $180 a month on fuel, down from July's peak of $250.
Oil industry watchers expect oil prices - and consequently pump prices - to soften further as a global recession kicks in.
One upshot of this is that some motorists who have been persuaded to take public transport because of the high fuel prices earlier may be jumping right back into their cars.
Headhunter Adrian Choo, 36, for example, said: 'I've been commuting by train. But I may consider driving to work now. The roads are less congested and there are more carpark spaces available.'
Others may have already started doing so.
Train operator SMRT Corp has seen a dip in the average number of commuters daily - from the peak of 1.45 million in July to 1.43 million in August and September.
Bus operator SBS Transit has also had fewer commuters on board daily - from 2.41 million in July to 2.36 million and 2.35 million in August and September.
SBS Transit said September's dip was probably because of the week-long school holidays, but could not explain the August decrease.
Meanwhile, the appeal of 'green' cars may also be fading along with lower pump prices.
In the third quarter, sales of petrol- electric hybrids from authorised agents averaged 62 a month, down from 79 in the previous two quarters.
Sales have also slumped for compressed natural gas (CNG) cars, from a high of 419 cars sold in July to 320 in August and 283 in September.
Mr Vincent Ng, product manager at Honda agent Kah Motor, said: 'Buyers are price-sensitive and are very fast to react to situations.'
Oil now trades at below US$70 per barrel, down from its July high of US$147.
Industry watchers expect the price slide to continue, although some, like Mr Ng Weng Hoong, editor of energy news portal EnergyAsia.com, said it will not last.
'I'm still sticking to my forecast of oil hitting US$200 by 2013,' he said.
For the moment, Consumers Association of Singapore executive director Seah Seng Choon said motorists could expect 'deeper cuts' as pump prices in the first half of last year, when oil was hovering above US$70, were lower than now.
Diesel, for example, should be '$1.20 to $1.30, not $1.40', he said.
In response, a Shell spokesman said: 'Pump prices today compared to pump prices in 2007 are not very far off from each other. The difference is a function of many other factors besides oil price.'
He noted that demand for diesel continued to be strong.
Elsewhere, the price of CNG is sliding too.
Retailer Smart Energy said its price will be $1.48 per kg from next Monday, from $1.56 a kg now and $1.65 last week.
