Are Petrol Prices in Singapore pegged to Crude Oil Prices?
After the announcement of Budget 2015, petrol companies were prompt in implementing the new petrol duty tax. Petrol duty tax for premium grade petrol (98-Octane) increased 20 cents to 64 cents, while intermediate grade petrol (92-Octane & 95-Octane) increased 15 cents to 56 cents. Since then, there was much debate on whether the companies were profiteering as some of the companies raised the pump prices in excess of the hike from the petrol duty tax.
In March 2015, I was honoured to be invited by MediaCorp producers to attend “Talking Point” to give my personal views as both a driver and a consumer. If you have missed this episode, you can head to Toogle and watch the recorded version. During the commercial break discussion with an oil industry veteran (Mr. Ong Eng Tong), I finally understood the background as to why the petrol prices in Singapore are priced similarly across the different companies. He shared much on the common business practices of the petrol industries. In summary, it is similar to how the telcos in Singapore operate and that is by sharing key infrastructures. Another key lesson learnt for myself is the understandings of the different petrol grades. Since that day onward, I decided to pump 95-Octane for my newly purchased car instead of 98-Octane. After trying out a few full tanks of 95-Octane petrol, I concluded that Octane level did not have relationship with the fuel consumption on my Kia Forte K3. Lastly, Mr. Ong also shared during the show on the different components that determines the pump prices as below:
While many of us do know that the prices of crude oil do play a great role in determining the pump prices, we do not have the detailed information as to how much. Since I started tracking pump prices via Petrol@SG, I do observe the close relationship between crude oil prices and pump prices. I have also received several requests from the public asking me if I do keep the history of pump prices/crude oil prices. Unfortunately, I did not. But now I have decided to spend a little time and start tracking. I am pleased to share that starting from 1 Apr 15, I will be tracking and keep a history of both pump prices in Singapore and crude oil prices (WTI & Brent). Hopefully, with a longer period of trending, we will have better understanding on the ups-and-downs relationship between crude oil prices and the pump prices in Singapore.
** Disclaimer: This graph is plotted via data extraction from Bloomberg and the sites of various petrol companies. The exchange rate used to convert USD to SGD is through Google Finance. The information above is for personal viewing and does not involve any commercials. **
The above chart will also be permanently shared at Petrol@SG where pump prices are displayed close to real-time changes of the petrol companies’ websites. I have also improved the charts of pump prices for better viewing. If time permits, I might do more analysis with the data captured or if you have ideas on how these data can be better manipulated to provide more insights, do feel free to email me for further discussion.
Last but not least, a great thank to MediaCorp producers, Evelyn Choo and Jiamin Lua, for the invitation. Guess this once-in-a-lifetime opportunity to appear on national television is too good a chance to be missed.