Reaping profits at motorists' expense?
Published on Aug 19, 2011
WHEN oil prices set a record of more than US$120 a barrel in 2007 and early 2008, and when the United States dollar stayed around S$1.45, motorists paid about $2 per litre for medium-grade petrol.
Today, global oil prices have dropped by more than 25 per cent to below US$90 a barrel, and the greenback has lost some 15 per cent of its value against the Singapore dollar.
Yet, motorists are still paying about the same price of nearly $2 for a litre of petrol.
Motorists and businesses have not benefited from the drop in oil prices and the US dollar, and this has translated into a huge profit of more than 35 per cent for all the petroleum companies in Singapore.
Minus inflation and other increases in costs, I venture the oil firms are still raking in an extraordinary profit of some 15 per cent to 20 per cent.
Shareholders and oil firm employees must be beaming, but the critical question is the lack of action on behalf of consumers.
What has the Consumers Association of Singapore done? Who else should take up the cause on behalf of consumers and what can be done?
Tan Ming Siang
Mobil explains pump pricing
Published on Aug 19, 2011
WE UNDERSTAND Mr Lim Kia Cheh's concerns ('Pump prices quick to rise, slow to fall', Forum Online; Aug 13). Pump prices do not rise or fall at the same time or magnitude as crude prices because pump prices are affected by a combination of factors, of which crude prices are but one of these many factors.
Commodity and product prices, while linked, also have different supply and demand dynamics.
In addition to market competition, fuel prices are determined by a number of other factors, including wholesale fuel prices (which may be different to crude oil prices), taxes and other operating costs.
Some Competition Commission of Singapore staff had recently carried out an in-depth, independent study into the fuel retailing market in Singapore.
Part of the study included an econometric analysis on the retail petrol prices to test if the 'rocket-and-feather' (where prices rise more or faster than they fall) phenomenon exists and they found that the results do not support the existence of such a phenomenon.
Loh Pin Chuan
Public and Government Affairs Manager
ExxonMobil Asia Pacific
Extracted From Straits Times
Reaping profits at motorists' expense?
ExxonMobil explains pump pricing
Published on Aug 19, 2011
WHEN oil prices set a record of more than US$120 a barrel in 2007 and early 2008, and when the United States dollar stayed around S$1.45, motorists paid about $2 per litre for medium-grade petrol.
Today, global oil prices have dropped by more than 25 per cent to below US$90 a barrel, and the greenback has lost some 15 per cent of its value against the Singapore dollar.
Yet, motorists are still paying about the same price of nearly $2 for a litre of petrol.
Motorists and businesses have not benefited from the drop in oil prices and the US dollar, and this has translated into a huge profit of more than 35 per cent for all the petroleum companies in Singapore.
Minus inflation and other increases in costs, I venture the oil firms are still raking in an extraordinary profit of some 15 per cent to 20 per cent.
Shareholders and oil firm employees must be beaming, but the critical question is the lack of action on behalf of consumers.
What has the Consumers Association of Singapore done? Who else should take up the cause on behalf of consumers and what can be done?
Tan Ming Siang
Mobil explains pump pricing
Published on Aug 19, 2011
WE UNDERSTAND Mr Lim Kia Cheh's concerns ('Pump prices quick to rise, slow to fall', Forum Online; Aug 13). Pump prices do not rise or fall at the same time or magnitude as crude prices because pump prices are affected by a combination of factors, of which crude prices are but one of these many factors.
Commodity and product prices, while linked, also have different supply and demand dynamics.
In addition to market competition, fuel prices are determined by a number of other factors, including wholesale fuel prices (which may be different to crude oil prices), taxes and other operating costs.
Some Competition Commission of Singapore staff had recently carried out an in-depth, independent study into the fuel retailing market in Singapore.
Part of the study included an econometric analysis on the retail petrol prices to test if the 'rocket-and-feather' (where prices rise more or faster than they fall) phenomenon exists and they found that the results do not support the existence of such a phenomenon.
Loh Pin Chuan
Public and Government Affairs Manager
ExxonMobil Asia Pacific
Extracted From Straits Times
Reaping profits at motorists' expense?
ExxonMobil explains pump pricing
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What's really inelastic is the demand - people will pump no matter what the price.
