The Competition Commission of Singapore did a study and concluded that there was no price collusion among oil companies ("Wholesale fuel and petrol pump prices aligned: Study"; Wednesday).
It noted that between June 2014 and last month, the wholesale petrol price fell by 53 per cent and the pre-discounted price of 95-octane petrol fell by 15 per cent.
It added that after discounts, rebates and February 2015's increase in petrol duty were taken into account, the 95-octane petrol price fell by 24 per cent in the period.
This implies that consumers enjoyed a total discount of 24 per cent on a 53 per cent fall in wholesale petrol price.
This is misleading.
Before the fall in wholesale petrol price, there were also discounts and rebates given, so these must be excluded from the comparison.
The study was based on the period from Jan 1, 2010, to Jan 31 this year.
During this period, petrol prices went up and then fell.
Will the Competition Commission show how petrol prices correlated to wholesale petrol prices and other costs during the up and down periods, separately? This will help convince consumers of their consistency.
Competition Commission chief executive Toh Han Li further said that the change in petrol prices cannot be 100 per cent in line with changes in wholesale fuel prices.
Since petrol companies have always insisted that pump prices are also affected by other components such as business costs and tax, they ought to give consumers an idea of the weighting of these components in determining the petrol price.
Consumers are reasonable. We do not demand a 100 per cent correlation in prices.
But a 15 per cent fall in petrol price from a 53 per cent fall in wholesale petrol price is too little. That is the gripe among consumers.
A fair correlation between the two should be where the change in petrol price is at least half the change in wholesale petrol price.
This is acceptable even when prices increase.
Steve Goh Han Choon