To up the ante, it dropped diesel rates two cents lower than the industry's five-cent cut on Monday.

But its price advantage was short-lived. Within hours, Caltex and Singapore Petroleum 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 before discount.

Shell's V-Power is $1.939, while Caltex's Platinum is $1.936.

And diesel is now $1.483 a litre.

Industry observers said Shell seems to have adopted a policy of being the first to lower pump prices. And if it fails to be the first, it will lower them further than the competition.

Today's price reduction is the 12th consecutive reduction since July; and comes on the back of sliding crude oil prices as the global financial meltdown dampens demand.