PETROL (Tax dollars earned and tax reduction)

Mr Steve Chia Kiah Hong asked the Deputy Prime Minister and Minister for Finance (a) what is the amount of tax dollars earned for each litre of petrol consumed at petrol stations; and (b) whether, in view of the rising petrol prices, there are plans to reduce the petrol tax.

Mr Lee Hsien Loong: Mr Speaker, Sir, for every dollar of the retail pump price, 35 cents go to petrol duty and 3 cents to GST.

Petrol duty was reduced from 40% to the current 35% last October as part of the off-Budget package to help Singaporeans cope with the economic downturn. I do not propose to further lower the duty on petrol.

Singapore's pump prices and petrol duty are not excessive compared to those of many other countries. For example, in the UK, the price per litre of petrol is about S$1.90. In Japan, it is about S$1.80; in France S$1.62. In Singapore, the average price is about S$1.20. The price of petrol in Malaysia is about half of that in Singapore. But Malaysia is an oil-producing country and the retail price of petrol is subsidised and controlled by the Government, and kept well below world prices.

As for petrol tax, it is up to 78% of the petrol price in the UK. In France and Japan, the tax on petrol is about 73% and 56% of the price, respectively. Singapore's petrol duty is 35% of the pump price.

Mr Steve Chia Kiah Hong (Non-Constituency Member): Sir, can the Minister advise whether the petrol duty is also used as a form of vehicle control and usage?

Mr Lee Hsien Loong: Mr Speaker, Sir, it is both a revenue measure and also a form of vehicle usage control. It is less important as a usage measure now because we have the ERP, but it is still not insignificant.