Petrol prices seem to always be on the rise. Extraction of the crude oil, and the subsequent refining of this finite resource seems to always outpace supply, which explains why fuel costs are always increasing.
But have you ever wondered why petrol prices in Singapore are so much higher than fuel of a similar octane rating just across the causeway? And how exactly is fuel priced in Singapore?
What Goes Into the Price of Fuel?
Petrol companies calculate the final per litre cost of their fuels via four separate, but related, factors. In Singapore, the price is derived by adding up the raw MOPS cost, operational overheads, taxes and fuel duties, and then subtracting sums for discounts and rebates.
MOPS (Mean of Platts Singapore)
This is a standard used to calculate the cost of each barrel of crude oil. Platts, an independently-owned global energy and petrochemicals information provider, predicts crude oil pricing two weeks to a month ahead of time, and is an accurate way of working out the unit cost of energy.
Operational Overheads
It all adds up – the cost of leasing the land their petrol stations sit on, as well as the manpower, electricity and infrastructure needed to keep their business operational. This is especially true in a country like ours, with high land, labour and energy prices.
Taxes & Fuel Duties
Quite possibly the only constant of the four factors. Tax rates, unless a revision is deemed necessary, are usually consistent. At the moment, premium petrol (defined as RON98 and up) will be subject to a duty of $0.79 per litre. Mass-market fuels (RON92 and 95) will cost you $0.66 per litre in tax. Let’s also not forget that a 7% GST is tacked on top of the total cost!
Rebates & Discounts
Membership and loyalty cards can net you some not-insignificant discounts. Partnering banks also offer attractive rebates should you use their cards. And each station also has an on-site discount, which usually is a fixed percentage irregardless of petrol pricing at that time. We strongly suggest you combine all of the promotions for maximum savings!
Saving on Fuel
You may now know what constitutes your final petrol price in Singapore, but there’s really not much you can do about it. That is unless you intend to sell your car, or switch to an electric vehicle. Still, there are ways to improve your overall economy, so you spend less on petrol.
Get rid of excess weight from your car, and also consider being less lead-footed. Finally, greater anticipation of your surroundings can also help in reducing your fuel bill!
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