I WAS surprised that the Consumers Association of Singapore (Case) did not lobby to reduce petrol pump prices, despite the 45 per cent drop in crude oil price from US$147 (S$199) per barrel in mid July this year to US$80 (S$118) per barrel last Friday.
Major oil companies have made record profits from consumers and now benefit even more with the delay in lowering pump prices.
Current pump prices have dropped only about 23 per cent since mid July, which means oil companies can further lower current pump prices by another 22 per cent.
This suggests that current popular grades such as 98, 95 and 92 unleaded petrol, at $1.97, $1.896 and $1.863 per litre respectively, can be lowered to $1.537, $1.479 and $1.453 per litre. There is still much room to reduce prices.
Oil companies will find reasons not to lower pump prices with explanations like: Petrol prices did not drop as much as crude price did; The refining margin is not fantastic; and Logistics and labour costs have risen.
I look forward to oil companies lowering their pump prices further. At the same time, they can support community and social projects by sponsoring needy families with public transport and utility vouchers, which constitute a significant portion of monthly expenses.
David Goh
This article was first published in The Straits Times on Oct 14, 2008.
