Petrol companies asked by authorities to explain price hikes

SINGAPORE — The Competition Commission of Singapore (CCS) has asked petrol companies here to explain their recent adjustments to pump prices this week, following price changes that went beyond the levels of the petrol duty hike announced in the Budget statement on Monday.

“We will not hesitate to take firm action against parties who are found to be engaging in anti-competitive behaviours at the expense of consumers,” said a joint statement from the CCS and ­Ministry of Trade and Industry (MTI) tonight (Feb 25).

The statement came on the heels of letters sent to petrol companies yesterday the Consumers Association of Singapore (CASE), asking them to justify their pump price increases.

The letters to the four main petrol companies — Shell, Chevron, ExxonMobil and Singapore Petroleum Company (SPC) — did not set deadlines for them to respond.

However, CASE executive director Seah Seng Choon said today that the companies have been given one week to respond — the usual practice — after which the consumer watchdog will follow up on the matter.

While noting that some companies have cut back on their price increases – Shell, for example, reduced its petrol pump prices by 2 cents by noon today – Mr Seah said some increments in pump prices are still higher than the petrol duty hike.

“We would still require the petrol companies to give a satisfactory explanation as to why their prices have increased beyond the tax increment,” he said.

Mr Seah also indicated that if their explanations are “not satisfactory”, CASE will file a complaint with the MTI.

The petrol duty hike of 15 cents and 20 cents per litre for intermediate and premium grade petrol respectively were announced by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in his Budget statement on Monday, as part of the Government’s efforts to discourage car usage and reduce carbon emissions.

The next day, pump prices of petrol brands, with the exception of Chevron’s Caltex, went up in amounts bigger than the hike.

For example, premium 98-octane petrol prices rose by 21 cents per litre at SPC and ExxonMobil’s Esso stations yesterday, while Shell’s premium V-Power went up by 25 cents. Prices for the 95-octane petrol – the most popular grade – went up by 18 cents at Shell, and 16 cents at Esso and SPC.

At Caltex stations, price increases were identical to the increase in the petrol duty hike. Intermediate and premium petrol respectively cost 15 and 20 cents more after 11am yesterday.

But Caltex and Shell later reduced their pump prices. Apart from Shell’s 2 cent reduction in its 95- and 98-Octane petrol today, prices of 92-, 95- and 98-Octane petrol at Caltex went down by 3 cents after 4pm.

As of today, only Shell, SPC and Esso pump prices stayed at levels beyond the hike announced on Monday. The 95-Octane petrol costs S$2.02 at Shell and Esso stations, 16 cents higher than the pre-Budget prices. The same grade costs S$2.01 at SPC and Caltex stations, 16 and 12 cents higher than pre-Budget prices, respectively.

In response to media queries, spokespersons from Shell and ExxonMobil pointed to various factors determining their petrol prices, apart from duty hikes. They include exchange rates, production costs, distribution costs of petrol, storage and service station operating costs.

Shell, SPC and ExxonMobil also cited the Good and Services Tax (GST) as a factor behind existing pump prices. “The Government taxes factored into pump prices are excise duties as well as goods and services tax. GST is computed inclusive of the petrol duty,” said an ExxonMobil spokesman.

A Chevron spokesperson said the company closely monitors international refined product costs and adjusts pump prices based on its own independent assessment.