Petrol companies pass on around 70 per cent of cost changes to consumers, says Competition Commission

Petrol companies pass on around 70 per cent of fuel cost changes to consumers, according to a study by the Competition Commission.
Petrol companies pass on around 70 per cent of fuel cost changes to consumers, according to a study by the Competition Commission.PHOTO: REUTERS

SINGAPORE - Petrol companies pass on around 70 per cent of fuel cost changes to consumers, the Competition Commission says.

The commission also said it found no evidence of price collusion between companies, even though petrol companies monitor and react to each other's published prices.

In a study of price movements from Jan 1, 2010, to Jan 31, 2016, the commission found that for every 10 cent change in wholesale price of petrol, listed pump prices moved by 7 cents.

It found "no significant" difference in the speed of change whether prices moved up or down.

For the period from June 2014 to January 2016 - when crude oil prices fell by 59 Singapore cents per litre or 67 per cent - average wholesale petrol price fell by 52 cents or 53 per cent while average pump price of 95-octane petrol fell by 35 cents or 15 per cent.

When discounts, rebates and petrol levy increase were stripped out, the average pump price of 95 octane fell by 45 cents or 24 per cent.

In February last year, the Competition Commission had ordered petrol companies to explain their latest price rises, which were more than the recent increase in government duty.

The move came after the Consumers Association of Singapore (Case) accused the four players here - Caltex, Esso, Shell and Singapore Petroleum Company (SPC) - of profiteering.

The commission also said it will be conducting a consumer survey on petrol demand in Singapore to understand consumer choices and switching behaviour on petrol purchases.

It will release the final report when the analysis of the survey result is completed.