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‘Counter-productive’ to reduce or suspend fuel duties as it would benefit those better-off: Lawrence Wong

SINGAPORE — While petrol prices have risen steeply, it would be counter-productive to reduce or suspend fuel duties or to provide road tax rebates, said Finance Minister Lawrence Wong in Parliament on Monday (April 4).

Subsidies on private transport would only benefit a relatively small and generally better-off group, as fewer than four in 10 households own cars, Finance Minister Lawrence Wong said.
Subsidies on private transport would only benefit a relatively small and generally better-off group, as fewer than four in 10 households own cars, Finance Minister Lawrence Wong said.
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  • Finance Minister Lawrence Wong said subsidies on private transport would only benefit a relatively small and generally better-off group
  • A better way to help Singaporeans cope with the rise in petrol prices is to provide them with the support measures that the Government has catered for in the Budget
  • Second Minister for Trade and Industry Tan See Leng said there is no evidence to suggest that there is collusion among the petrol retailers

SINGAPORE — While petrol prices have risen steeply, it would be counter-productive to reduce or suspend fuel duties or to provide road tax rebates, said Finance Minister Lawrence Wong in Parliament on Monday (April 4).

He said such subsidies on private transport would only benefit a relatively small and generally better-off group, as fewer than four in 10 households own cars. Furthermore, among households who earn the lowest 20 per cent of household incomes, only about one in 10 do.

As for the cutting of fuel subsidies, Mr Wong said such a move would also mean that some of the subsidies would flow back in part to producers and suppliers themselves, and not just to consumers, as the pump price may not fall as much as the reduction in duty.

“More importantly, such subsidies will reduce the incentive to switch to more energy-efficient modes of transport, which is a critical element in our plans for sustainable living,” said Mr Wong during a joint ministerial statement on inflation and business costs.

Instead, he said the better way to help Singaporeans cope with the rise in petrol prices, as with inflation in general, is to provide them with the support measures that the Government has come up with in the Budget.

“Through these measures, we are extending concrete help directly to Singaporeans to cope with their different areas of needs, including their utility bills, children’s education and daily essentials, and we are providing more targeted help for the lower-income groups,” he said.

Mr Wong said fuel duties collected averaged S$920 million a year over the last five years.

The revenue from these duties and taxes adds to the pool of resources available for various programmes and subsidies that directly benefit Singaporeans, he said.

This includes spending on public transport, for which Singapore provides significant capital investments, as well as operating subsidies to ensure an affordable public transport system.

Nevertheless, Mr Wong said he recognises that there are several groups, such as taxi and private hire car drivers and delivery riders, who are affected by the increases in petrol and diesel prices.

At present, various taxi and private hire car operators have implemented temporary increases in fares to help cushion the higher fuel prices for drivers, and to have consumers share the burden.

Some firms also have tie-ups with petrol companies to offer fuel at discounted prices, to help drivers and riders manage higher fuel costs.

For those whose incomes are impacted and are in need of financial assistance, Mr Wong said they can approach the social service offices, community centres or self-help groups.

NO EVIDENCE OF COLLUSION

During his ministry’s segment of the statement, Second Minister for Trade and Industry Tan See Leng said there is no evidence to suggest that there is collusion among the petrol retailers.

Dr Tan, who is also the Manpower Minister, said the Competition and Consumer Commission of Singapore (CCCS) keeps a close watch on the movements in pump prices.

Thus far, he said the movements in pump prices largely mirror the movements in crude oil prices — though they have increased to a smaller extent.

For example, as of end-March this year, he said crude oil prices were about 40 per cent higher than in January this year, while the price of petrol and diesel were, on average, about 15 per cent and 30 per cent higher respectively.

“CCCS will take firm enforcement action, including imposing financial penalties on infringing firms, if there is any evidence of anti-competitive behaviour, such as coordinated price increases, in any industry,” said Dr Tan.

In any case, to deter unreasonable pricing, Dr Tan said consumers should also be well-informed on alternative options, through platforms such as the Price Kaki application and the Fuel Kaki website developed by the Consumers Association of Singapore (Case).

Case, said Dr Tan, will be enhancing the Price Kaki application to enable users to compare the prices of similar items by their weight and volume.

Furthermore, he said the Committee Against Profiteering has also been reconvened ahead of the Goods and Services Tax (GST) increase.

The role of the committee is to investigate feedback on unjustified increases in the prices of essential products and services using the GST increase as an excuse.

Dr Tan said the Government will work closely with the industry to diversify Singapore’s supply chains and to investigate anti-competitive behaviour.

This, along with encouraging price transparency and enabling free-market competition to “function as it should”, is the best way to safeguard consumer interests, he added.

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cost of living Lawrence Wong fuel price

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