Proposal to Regulate Petrol and Diesel Pump Prices Given Recent Increases

Ms Joan Pereira asked the Minister for Trade and Industry whether the Government will consider setting up a cooperative to supply petrol to help moderate the costs of fuel.

Mr Don Wee asked the Minister for Trade and Industry whether the Ministry will regulate petrol and diesel pump prices in view of their escalating prices amid record profits for oil companies.

Global crude oil prices have risen significantly, driven by higher demand as economies reopen following the pandemic as well as constrained supplies due to sanctions against Russia and under-investment in fossil fuel production over the years. Fuel prices in Singapore have also risen in tandem.

In response to Ms Joan Pereira's question, retail pump operators, including cooperatives, which wish to supply fuel to independent motorists will need to operate at sites that are suitable for such purpose, including the need to comply with prevailing environmental, fire safety and other requirements. Such sites are identified and then allocated via competitive tender from time to time. So, a cooperative may not be able to offer lower pump prices unless they can secure lower-cost supplies.

In response to Mr Don Wee's question, 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 will also reduce the incentive for Singaporeans to switch to more energy-efficient modes of transport.

Instead, the Government's approach is to ensure that we have a competitive fuel retail market.

I want to assure all Members and the House that the Competition and Consumer Commission of Singapore (CCCS) monitors the fuel market closely and will not hesitate to investigate the practices of the retail operators. We will take firm enforcement actions against any anti-competitive behaviour.

I would also like to encourage motorists to make good use of the Fuel Kaki website, developed by the Consumers Association of Singapore (CASE), to compare the effective price of petrol and diesel across retailers, including the various discounts and rebates being offered.

In addition, the Government is also providing targeted assistance to the groups hardest hit by rising fuel costs.

Last month, Deputy Prime Minister Lawrence Wong announced support measures for self-employed persons whose livelihoods depend on their vehicles. Eligible taxi main hirers and private hire car drivers will receive a one-off relief of $150 next month. Drivers of combi buses and limousines who are members of the National Private Hire Vehicle Association, as well as delivery drivers and delivery motorcycle riders who are members of the National Delivery Champions Association can apply for a one-off cash relief of up to $300 next month under the NTUC U FSE Relief Scheme 2022.

The Government will review the fuel retail market to determine if there are other ways to alleviate the pressure on fuel prices. We will continue to monitor the situation and will not hesitate to provide more assistance if required.

Mdm Deputy Speaker, I am glad to know that MTI sees the need for a review of the fuel retail market. May I know what are the aims of this review and how will the review ensure that the fuel prices are representative of the global competitive fuel market?

I want to thank the Member, Mr Don Wee, for his two supplementary questions.

The MTI review will cover how the global developments as well as the practices of our fuel retail operators have led to the pricing trends seen so far. To support this study, CCCS has gotten in touch with the retail fuel operators for data on the fuel price movements.

I want to use this opportunity to assure everyone in the House that the Government continues to ensure that we have a conducive and also competitive business environment where consumers have options, choices and are able to enjoy competitive prices.

At the same time, we will also maintain our efforts to make sure there is price transparency for our consumers. For instance, the Fuel Kaki website not only helps consumers to compare prices among the fuel retailers but also allows them to estimate the effective price per litre that they pay, after factoring in loyalty programmes and promotions.

If the findings of the review suggest that there are ways to improve the fuel retail market, I want to assure the Member that the Government is, certainly, open to consider all measures that could enhance the effectiveness of the fuel retail market. Rest assured that the Government is committed to ensuring a competitive fuel retail market.

[Pursuant to Standing Order No 22(3), written answers to questions not reached by the end of Question Time are reproduced in the Appendix, unless Members had asked for questions standing in their names to be postponed to a later Sitting day or withdrawn.]