Singapore rules out pump price caps amid rising fuel costs

SINGAPORE will not consider controls on petrol and diesel pump prices, even as fuel costs here climb on the back of higher global crude oil prices, Minister of State for Trade and Industry Low Yen Ling said in Parliament on Tuesday (Jul 5).

“The government’s approach is to ensure that we have a competitive fuel retail market,” she said, adding that it will also review the market “to determine if there are other ways to alleviate the pressure on fuel prices”.

Pointing to measures such as targeted relief for certain workers for whose livelihoods depend on driving, and the ability of the Competition and Consumer Commission of Singapore (CCCS) to take enforcement action against anti-competitive behaviour among fuel retailers, she also said: “We will continue to monitor the situation and will not hesitate to provide more assistance if required.”

Low added, to a query by MP Don Wee (Chua Chu Kang GRC) on the aims of the review and how it will ensure that fuel prices are representative of a competitive global market, that it would cover “how the global developments as well as the practices of our fuel retail operators have led to the pricing trends seen so far”.

The CCCS is in touch with retail fuel operators for data on fuel price movements, to support the study, she disclosed. Wee and fellow People’s Action Party MP Joan Pereira (Tanjong Pagar GRC) had earlier filed parliamentary questions about how the government might address fuel costs.

Wee asked whether the Ministry of Trade and Industry would “regulate petrol and diesel pump prices in view of their escalating prices amid record profits for oil companies”.

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To that, Low said: “Regulating or capping petrol or diesel pump prices will distort the market and serve to benefit car owners, especially those who consume more, who may include more well-to-do users.” It could also reduce the incentive for Singaporeans to switch to more energy-efficient transportation, she added.

Meanwhile, Pereira asked whether the government would consider “setting up a co-operative to supply petrol to help moderate the costs of fuel”.

Low replied that sites for retail pump operators – including co-operatives – to supply fuel “are identified and allocated via competitive tender from time to time”. Still, they “may not be able to offer lower pump prices unless they can secure lower-cost supplies”, she noted.