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Singapore competition panel urges more transparency in petrol pricing
THE Competition Commission of Singapore has called for greater transparency in the retail petrol market to allow motorists to make more informed purchases.
To foster a more competitive retail petrol market, the CCS said motorists should be able to make better comparison of the various petrol pricing schemes.
The call for greater transparency came after the commission recently concluded an inquiry of the retailers' pricing process, including how crude oil prices affect retail petrol prices in Singapore.
The inquiry also looked into Singapore motorists' purchasing habits - and how they decide between brands.
The competition panel said meanwhile it is exploring the development of a Web portal or mobile app to make more information on effective retail petrol prices available. This will also help motorists make more informed purchases and encourage greater competition among 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.
CCS found during its inquiry 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 detected no collusion among local retailers to game prices despite similar price changes or convergence among retailers. The latter was due possibly 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.
CCS' 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 petrol grade recommended by the engine specification listed in the vehicle owner's manual generally allows the best engine performance," CCS said, adding it would continue to advocate more consumer awareness through appropriate channels.