CAB commuters may have something to cheer about soon, as the 30-cent fuel surcharge introduced in July may be lifted.
ComfortDelGro, Singapore's largest taxi operator, which initiated the unprecedented levy three months ago, is meeting the Taxi Operators' Associations today to review the surcharge.
If the company decides to drop or reduce the surcharge, the other, smaller players are likely to follow suit.
ComfortDelGro spokesman Tammy Tan said: 'We had committed to removing it when market pump prices fell to December 2007 levels.'
Though the price of diesel has fallen by about 25 per cent since July, she noted that it had not reached $1.19 a litre - the lowest price sold at public pumps last December.
'But given the current economic climate, we want to help. So we are reviewing the surcharge with the association,' she added.
Mr Chang Meng Dong, the executive secretary of the Taxi Operators' Associations, which represent drivers of six cab firms, confirmed the meeting. Asked for their reaction to the proposal, he said: 'I'm not prepared to comment further at this point.'
But the prospect was welcomed by Consumers Association of Singapore president Yeo Guat Kwang.
'It's about time. Airlines are starting to remove surcharges,' he said.
'Service providers have to be responsive. When costs are up, we understand, but when costs come down, we look forward to timely adjustments.'
Cabbies themselves seem ambivalent. Veteran driver Tony Pang, 59, said: 'Most of my colleagues feel that if it is not removed, more people will stop taking cabs because of the economy.
'I think they should be firm on their previous stand and remove the surcharge only when diesel outside hits $1.19.'
The fuel surcharge was introduced to ease the burden on cabbies, who were faced with higher fuel costs despite subsidies.
Taxi firms traditionally offer discounted diesel to their cabbies at their own pumps. The discount can be as much as 35 per cent off commercial pump prices. But cabbies noted that the discount has been reduced since the fuel surcharge was introduced.
In July, ComfortDelGro was selling diesel at $1.19 a litre, 64 cents lower than the public pump rate of $1.83.
Today, the respective prices are $1.10 and $1.397, a gap of about 30 cents, leading some to question if the surcharge had, in fact, gone to help the taxi firms.
Mr Chang would not comment.
Stock analysts who track ComfortDelGro expect it to yield better diesel revenue and earnings in the second half of this year. Nomura Singapore, for one, is forecasting an $11 million pre-tax profit, from a $17.6 million loss in the first half.
Ms Tan of ComfortDelGro countered: 'We are still subsidising diesel and losing money on it.'
This article was first published in The Straits Times on Oct 24, 2008.
