The cost of diesel breached the $2 mark yesterday after the latest round of pump price increases.
Shell raised the pump price of petrol by five and diesel by 10 cents at 4pm.
When contacted last night, none of the other three petrol companies SPC, Caltex and ExxonMobil had raised its prices yet.
With the latest adjustments, a litre of 98-octane petrol costs $2.36 before discount. The 95 grade is now $2.286, with 92-octane at $2.253. A litre of Shells V-Power premium fuel will set you back by $2.479.
Diesel, which is used by buses, taxis and heavy vehicles, now costs $2.033, the first time it has crossed the $2 mark.
Diesel prices have gone up by 80 cents in the last 12 months, a 40 per cent increase and the most among the five main fuel variants at pump stations here.
This latest round of price hikes is the 14th since July last year. It comes as crude oil prices reached another record high of US$146.69 (S$199.35) per barrel two days ago.
A Shell spokesman explained that crude oil prices are not the only reason for petrol price increases.
Strong demand from China and India,as well as the increase in costs for transport, and political volatility in some oil-producing countries are all factors that may affect pump prices.
The higher diesel prices are likely to affect the transport sector the hardest.
Private bus operators had earlier been reported as saying that they have raised prices by at least 10 per cent in the last few months, largely because of rising diesel prices.
Mr Lionel Lim, owner of Bedok Transport, foresees hard times ahead for the whole private bus industry as a result of the increasing prices.
However, as the bus operators have only recently raised prices, Mr Lim said that it is unlikely that they will increase (prices) again.
Motorists here are also switching to cheaper alternatives.
Some have given up their cars and moved to public transport.
Others have downgraded to smaller cars or two-wheelers. A growing number have opted for hybrid engine cars or retrofitted their cars to run on compressed natural gas.
This article was first published in the Straits Times on July 5th 2008.
