PUMP PRICES OF GASOLINE

PUMP PRICES OF GASOLINE: 1.

Er Lee Bee Wah asked the Minister for Trade and Industry (a) if he can explain why pump prices of gasoline have risen several times when the US dollar has weakened against the Singapore dollar; and (b) whether his Ministry has been monitoring the rise in pump prices of gasoline to ensure that the oil companies are not profiteering.

The Senior Minister of State for Trade and Industry (Mr S Iswaran) (for the Minister for Trade and Industry): Mr Speaker, Sir, the Ministry of Trade and Industry closely monitors the price of petrol, as part of our efforts to keep track of overall trends in inflation as well as to ensure that our key inputs and resources are competitively priced.

Petrol prices in Singapore are influenced by the combination of global oil prices in US dollars and the exchange rate between the Singapore dollar and the US dollar. Global oil prices have increased by 75% in US dollar terms from January 2007 to February 2008, and this has only been partly offset by the 8% appreciation of the Singapore dollar against the US dollar. Our petrol pump prices have increased on average by 35% in Singapore dollar terms. If the Singapore dollar had not strengthened against the US dollar, petrol pump prices would have increased even more.

Mr Speaker, Singapore is a price taker for fuel; we cannot influence global prices. Our best guard against excessive petrol prices and petrol price increases is to ensure that the retail market for petrol is competitive and we monitor this very closely. We do not have any evidence of collusion among retail petrol companies and the Competition Commission of Singapore looks out for anti-competitive activities and stands ready to take decisive action in the event of such activities.