No collusion, more transparency needed in Singapore petrol market
Competition regulator found no evidence but is exploring developing price comparison app
There is no evidence to suggest collusion between petrol retailers, the Competition Commission of Singapore (CCS) found from an inquiry into the pricing process and purchasing habits in the market here, but more transparency of effective retail petrol prices is needed.
The body, which announced its findings yesterday, said it is exploring developing a mobile app and web portal for such price comparisons.
It is the competition regulator's second inquiry into the retail petrol market, which took place when the price of crude oil fell by more than half between June 2014 and January 2015 and it received feedback that petrol prices had not fallen in tandem with declines in crude oil prices.
The first inquiry happened in 2011 and also found no evidence of anti-competitive behaviour.
By analysing information from ExxonMobil, Shell, SPC and Caltex, industry experts and motorists, CCS found that price changes among petrol retailers here do not always move in tandem.
It said in its report: "Petrol retailers regularly monitor and react to each other's published retail petrol prices and associated promotions in an effort to retain customers or to win new customers."
Petrol retailers use what is known as the Means of Platts Singapore price to determine retail petrol prices, which tends to be higher than crude oil prices as the former includes the cost of refining the crude oil into wholesale petrol.
CCS also found that between 2010 and 2015, the retail petrol price increased from $1.87 to $2.13 due to increases in non-fuel components such as gross profits and operating costs by retailers, levies and taxes.
The wholesale petrol cost had fallen from $0.77 (41 per cent) to $0.62 (29 per cent) of the petrol price, in this period.
CCS said a price comparison app or web portal could empower consumers and encourage transparent competition among retailers here.
While listed prices are similar across retailers, the effective price to consumers can be lowered by between 5 per cent and over 20 per cent with loyalty programmes and credit card discounts.
Nine in 10 consumers used petrol discounts and rebates on a regular basis.
Such rewards, among other reasons such as convenience, partly account for a strong brand loyalty among consumers. Close to six in 10 motorists did not switch petrol brands between 2012 and last year.
While an average of just 22 per cent of consumers compared prices across petrol brands, CCS found that motorists in Singapore could save $40 million a year if they all monitored petrol prices with comparison websites and apps.
While such products currently exist in the market, CCS said "none of them provide complete and real-time updates on petrol price changes and applicable discounts in a manner that is easily comparable between all petrol retailers."
GPS navigation app Galactio-SG allows users to access a page where petrol prices are listed.
Mr Daniel Poon, head of enterprise sales of Quantum Inventions, which built the app, told The New Paper the company manually updates the prices by checking the retailers' websites and Facebook updates as well as from user feedback.
"We do not know when the prices will change, and sometimes it will happen within the day. Data update is a challenge and occasionally people will say it is not updated," he said.
He welcomed a price comparison app that could provide more authoritative information about price changes.
But Mr Mark Cheng, editor at personal finance website Moneysmart.sg, said such an app might not be so useful for consumers.
He said consumers tend to stick to certain brands out of convenience and get on board credit cards and loyalty programmes that can give generous savings for these brands.
He added: "If the price difference is not that big and if you have already optimised savings in different ways, what is the price comparison going to do?"