Benefits of declining oil prices not trickling down to consumers

The explanation by the Energy Market Authority (EMA) in the letter “Electricity tariffs: Daily gas prices fell by only 3 per cent” (Oct 8) goes some way towards better informing end-users in Singapore about the correlation between international oil prices and local retail consumer prices.

However, it is unclear why fuel price movements are calculated on a two-and-a-half-month period while the tariffs extend over a whole quarter. It would have been helpful to the layman had the EMA provided some figures to support the statement that the “overall reduction in average daily gas price in the period was just 3 per cent”.

It was also illuminating to learn that non-fuel components make up 50 per cent of the cost borne by the consuming public. Apart from the inevitable 7 per cent Goods and Services Tax, it would be interesting to know what the other cost factors are — notably whether other taxes come into the reckoning.

Oil prices have sunk to a four-year low (below US$83), but the corresponding benefits do not appear to be trickling down to consumers.