Motorists, experts unsure how effective platform would be

The Competition Commission of Singapore has proposed developing a platform to allow drivers to better compare petrol prices.
The Competition Commission of Singapore has proposed developing a platform to allow drivers to better compare petrol prices.ST PHOTO: LIM YAOHUI

The Competition Commission of Singapore has proposed developing a platform - a Web portal and/or mobile application - to allow drivers to better compare petrol prices.

But motorists and experts The Straits Times spoke to said that they were not sure how effective such a price comparison platform would be.

A key reason cited is that motorists who need to top up their tanks tend to go to their preferred petrol company because of certain perks they enjoy, so they are unlikely to bother about comparing prices to find out whose petrol is cheaper.

Mr Calvin Tan, 40, who works in sales, told The Straits Times: "Usually we don't hop around so much, unless there is a big discount."

He said he usually gets his petrol from Singapore Petroleum Company, which offers lower rates as he enjoys a credit card discount.

Logistics provider Ken Wong, 44, who has been driving for more than two decades, added that while a price comparison app "would definitely be useful... I don't think we'll get a meaningful benefit out of it".

"It would be great to have real-time price comparison, but how 'realistic' are these prices? Are they pre-fixed? How will this reflect a real price pegged to the price of crude oil?"

A motorist who said he would use the online platform is semi-retired business consultant Andrew Tan, 61, who goes to Caltex because he has a Safra discount.

But he said he hoped the platform would "compare apples to apples", given how different brands offer different promotions.

Singapore University of Social Sciences economist Walter Theseira has "some doubts" about how effective such a platform would be. "The fundamental problem with the petrol market in Singapore is that the pricing is not transparent, primarily because of a fairly complex discount system. The discount levels vary according to the credit card you have," he said.

"In many countries, petrol stations are independently owned and franchised."

This means owners can adjust their own prices independently, depending on local conditions - and they could even compete with their own brand.

"In Singapore, all the main petrol retailers pretty much have nationwide prices for petrol. In deciding the petrol prices at national levels, it's unclear how much competition you can generate."

A version of this article appeared in the print edition of The Straits Times on December 20, 2017, with the headline 'Motorists, experts unsure how effective platform would be'. Print Edition | Subscribe