Singapore petrol prices dip after weeks of increases fuelled by Iran war

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SINGAPORE – After climbing steadily for three weeks, petrol prices in Singapore have begun to ease, with pump rates dipping since March 25 as oil markets reacted to shifting signals from the Middle East conflict.

The pullback followed a sustained run-up triggered by the war in Iran, where disruptions to the Strait of Hormuz – a key global oil supply route – tightened supply expectations and drove crude prices higher.

The first sign of relief came on March 25, when petrol prices were cut after nearly three weeks of increases. Shell lowered its posted prices of 95- and 98-octane petrol, as well as its premium V-Power grade, by five cents, while diesel prices were left unchanged after a sharp rise a day earlier.

The downward adjustments extended into March 26, marking the second straight day of declines.

Esso led with a five-cent cut across its petrol grades, followed by Sinopec, which matched the reduction for its 95- and 98-octane fuel and lowered its premium X-Power grade more steeply by 18 cents. Caltex joined later in the day with similar cuts for petrol, although it raised diesel prices by 20 cents.

SPC also lowered its petrol prices by five cents, with its posted price for 95-octane fuel at $3.41 per litre as at the evening of March 26.

Sinopec lowered its petrol prices again on the morning of March 27, cutting its 95- and 98-octane fuel as well as its premium grade by five cents.

Shell cut its 95- and 98-octane petrol and premium grade by a further two cents, bringing its 95-octane price to $3.40 per litre as at 4.50pm on March 27, the lowest among major operators.

Following the latest revisions, the price of 95-octane petrol – the most widely used grade – ranged between $3.42 and $3.46 per litre across major operators on March 26.

Posted prices do not consider discounts and may be higher than what drivers pay at petrol stations.

The easing of petrol prices on March 25 and 26 came on the back of volatile global oil prices, which have swung sharply in response to developments in the Middle East.

Brent crude briefly fell below US$100 on March 25 after Iran signalled that “non-hostile vessels” could pass through the Strait of Hormuz if they coordinated with its authorities, easing immediate supply fears.

But the reprieve proved fragile.

Oil prices rebounded above US$100 on March 26 as Iran denied that formal negotiations were under way and indicated that any ceasefire discussions would be complex, underscoring the uncertainty facing global energy markets.

The dip in pump prices came after a sharp and sustained climb since the conflict began on Feb 28, when the US and Israel launched strikes on Iran.

Within days, petrol stations in Singapore began raising prices, tracking the surge in crude oil costs and anticipating higher supply chain expenses such as freight and insurance. By mid-March, pump prices had surpassed levels seen during the Ukraine war in 2022.

At one point, the price of 95-octane petrol had risen by nearly 20 per cent from pre-war levels, translating to significantly higher costs for motorists filling up their tanks.

The impact has rippled across the broader transport sector. Taxi operator ComfortDelGro said on March 17 that it would temporarily raise fares and introduce booking fees to help drivers cope with higher fuel costs, while ride-hailing platforms rolled out discounts and rebates to cushion the impact.

Even as petrol prices eased, diesel has continued its upward trend, diverging from petrol’s trajectory.

Diesel prices in Singapore overtook those of 95-octane petrol on March 12, reflecting the tighter global supply of middle distillates even before the conflict began.

Industry observers said this was exacerbated by strong demand from major economies and ongoing supply concerns.

Analysts noted that petrol prices in Singapore were not regulated and were adjusted daily by retailers, based largely on international oil price benchmarks and other cost factors. As a result, local pump prices tended to respond quickly to geopolitical shocks.

While the recent declines may offer some respite, analysts cautioned that volatility is likely to persist as long as the conflict in the Middle East remained unresolved and supply risks lingered.