Parliament: Fall in pump prices here in line with global oil price plunge, says Dr Tan Wu Meng

Senior Parliamentary Secretary for Trade and Industry Tan Wu Meng said that retail petrol prices here have fallen with the steep decline in crude oil prices earlier this year.
Senior Parliamentary Secretary for Trade and Industry Tan Wu Meng said that retail petrol prices here have fallen with the steep decline in crude oil prices earlier this year.PHOTO: ST FILE

SINGAPORE - More than three-quarters of the recent drop in the price of crude oil has been passed through to customers, Dr Tan Wu Meng, Senior Parliamentary Secretary for Trade and Industry, said on Wednesday (March 25).

Dr Tan told Parliament that retail petrol prices here have fallen with the steep decline in crude oil prices from US$66 a barrel  to US$34 between Jan 2 and Mar 9.

"The listed price of Octane 95 petrol fell by 20 cents per litre, with a slight lag of six days," he said. "This represents a pass-through of over three-quarters of the decrease in crude oil price."

Ms Lee Bee Wah (Nee Soon GRC) had asked if retail prices at petrol pumps reflected the plunge in crude oil rates. She also questioned the lag in the price decrease being passed on the customers.

Dr Tan noted that crude oil has to go through refining and processing before it becomes petrol at the pumps. "There will also be operating costs, taxes, duties and land costs on the one hand, as well as discounts and rebates on the other hand," he added.

So, a pass-through rate of about 70 per cent is typical, Dr Tan said, citing an in-depth study on retail petrol prices in 2017 by the then Competition Commission of Singapore.

He added that the market determines retail petrol prices.

The survey also found that, on average, petrol prices take longer to go up when global crude oil prices increase, compared with the decrease when crude oil prices fall.

He urged consumers to view petrol price comparisons across brands on the Fuel Kaki website, which is part of the Consumers Association of Singapore's efforts to help customers make informed decisions.

 

"Well-informed consumers are a key deterrent against unreasonable pricing decisions," Dr Tan said.