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Singapore competition panel urges more transparency in petrol pricing
THE retail petrol market should make petrol pricing schemes more transparent, to enable motorists to make better price comparisons among retailers and hence, make more informed purchase decisions, said the Competition Commission of Singapore (CCS).
This would facilitate a more price-competitive retail petrol market in Singapore, the CCS said, as retailers would need to offer better prices and promotions to retain or attract customers.
This, among other findings, was part of the commission's recently concluded inquiry which sought to understand retailers' pricing process, including how crude oil prices impact retail petrol prices in Singapore, and to understand the purchasing habits of motorists in Singapore, including how they decide between brands.
CCS is exploring the development of a Web portal or mobile application (app) to make more pricing information on effective retail petrol prices available to consumers, which will help them make more informed purchases and encourage more transparent competition among the retailers, "given the potential entry of a fifth petrol retailer in Singapore".
Chinese oil giant Sinopec recently announced it was looking to start fuel retail operations in Singapore "some time" in 2018.
The competition panel found that customers who monitored prices across brands through comparison websites or apps enjoyed more discounts, compared to those who monitored prices through means such as on-site displays or retailers' websites.
"This would translate to potentially S$40 million (in) savings per year, if all motorists in Singapore monitor petrol prices through comparison websites or mobile/tablet applications."
In other findings, the CCS also detected no collusion among local retailers to game prices despite similar price changes or convergence among retailers, possibly due to retailers regularly monitoring and reacting to one another's listed prices and promotions in an effort to retain or win new customers.
The commission's data showed there is price differentiation among retailers through discounts and rebates under various loyalty programmes, resulting in effective retail prices which were lower by 5 to over 20 per cent than listed prices.
Its consumer survey found nearly all consumers enjoy petrol discounts and rebates on a regular basis.
More than half of Singapore motorists said that they remained with their respective petrol brands between 2012 and 2016, citing the convenience of station locations, satisfaction with credit or debit card promotions and loyalty programmes, accessibility to a wide network of stations, and protection of the vehicle's engine as factors to stay.
CCS data also showed 63 per cent of motorists purchased a higher grade of petrol than needed for their vehicles. They perceive higher grades as better, despite studies showing higher grades do not optimise engine performance.
"Using the correct gasoline grade recommended by the engine specification listed in the vehicle's owners' manual generally allows the best engine performance. CCS will continue to advocate more consumer awareness through appropriate channels."