Petrol Prices

Car prices in Singapore are among the highest, if not the highest, in the world. Adding to the woes of motorists here are high petrol prices – so much so that some civic minded individuals have taken it upon themselves to monitor the changes in pump prices over the years and make the information available to everyone. Some of these sites include:

• http://www.chenlim.com/fuel/
• http://www.cozylittlehaven.net/petrolsg/
• https://www.facebook.com/PetrolWatchSingapore/

Crude Oil Prices vs Petrol Prices

Contrary to what some people think, a reduction in crude oil prices does not result in a reduction in petrol prices by the same percentage. This is because crude oil is a raw material and petrol is just one of its by-products, and petrol prices are also affected by other factors such as:

• Refining costs
• Marketing costs
• Shipping & distribution costs
• Corporate profits
• Government taxes.
• Demand & supply
• Oil contracts & futures

As a guideline, the U.S. Energy Information Administration has estimated that crude oil prices make up 71% of the price of petrol.

Quick to Go Up, Slow to Come Down

People have noticed that petrol companies are quick to match price increases whenever oil prices surge and slow to reduce prices whenever oil prices dip. At the time of this post, even though oil prices have gone below USD 30 a barrel for the first time in the past 12 years (and prices are expected to go even lower), motorists in Singapore have not seen really significant reductions in petrol prices even though crude oil prices have tumbled over the years.

For example, crude oil prices were trading at an average of over USD 100 per barrel in 2011 and less than USD 30 in 2016. But in the chart above, you can see that Caltex 95 was going for SGD 2.07/litre in 2011 and SGD 1.91/litre in 2016.

Ease of Comparison

Most of Thailand’s petrol stations have a giant billboard at their entrances that shows the current prices of the different grades of petrol. This allows motorists to compare prices across different pump stations easily, even if they are speeding along at 80km/h.

Few of Singapore’s petrol stations have this billboard at their entrances. The only ways a motorist can get information on current petrol prices is to go online in advance or drive into a petrol station and ask.

Confusing Petrol Prices – Singapore

Unlike in Thailand, where what you see is what you get when it comes to petrol prices, you will probably need a Phd in rocket science in order to calculate the final price for your petrol in Singapore. This is because, depending on which credit card and loyalty card you use as well as how much petrol you pump at each station, you can get discounts of up to 20% off the initial price. This complicates matters as the station with the cheapest stated price may not be the cheapest when you factor in all of these aspects.

So if you go to a station where you do not have their preferred credit card or loyalty card, tough luck, you will have to pay more for you petrol and the petrol company gets to make extra money off you.

Singapore vs Thailand

For an idea of how expensive petrol in Singapore is, Caltex 95 is currently going for SGD 1.91/litre (THB 47.75) in Singapore and THB 23.50 in Thailand. Even if you apply the maximum discount of 20% on the Singapore price, it will come to 38.20 which is still 62.6% higher than the price in Thailand.

Assuming the refining costs, marketing and distribution costs etc, are similar for both countries, where do the additional 62.6% profits go to?