Singapore petrol prices up in long-overdue move

This article belongs to the Singapore inflation watch story arc.

asiaone.com, petrolwatch.com.sg :

The other oil companies have all followed Caltex's move to raise pump prices here. ExxonMobil, Singapore Petroleum Co and Shell on Wednesday [23 Apr 2008] upped petrol prices by three cents a litre and diesel by five cents. Their increases, within hours of each other, came a day after Caltex revised prices upwards. With the changes, a litre of 92, 95 and 98-octane petrol is $2.083, $2.116 and $2.190 before discount, while diesel is $1.663. Shell's V-Power is $2.309, while Caltex's Platinum is $2.316.

The latest pump price adjustment is the 10th consecutive increase since July last year [2007] - 11th if the GST-triggered increase on July 1, 2007 were to be included. Singapore's Goods & Services Tax [GST] was raised from 5 to 7 per cent last July. Some observers have questioned why pump prices here are not softening on the back of the strengthening Singapore dollar.

- Either these observers lack an understanding of the crude oil and currency exchange markets or they are just spouting nonsense. Maybe both. A look at the historical USD/SGD forex rate shows that the SGD has strengthened (relatively, I must always add) by around 11% (from 1.53 to 1.35) from Jan 2007 till now, but crude oil has strengthened even further, going up by a whopping 133% ($51 to $119 per barrel). And people are wondering why a strengthening currency isn't helping. This is because even though we Singapore folks may be in a currency that has "strengthened", the underlying commodity has "strengthened" further. I have been making this point again and yet again, but then of course very few people look at this the way a peakoiler would.

I would also say that this is a long-overdue move because the last time that the petrol prices went up was back in March when crude oil prices were hovering in the $100-110 range (and that was precisely what I was thinking when I filled up my tank on Monday, just a couple of days before the price increase). Now we're in the $110-120 range and it sure took them long enough to adjust their prices upward. Then again, I'm not looking at this from the point of view of most of the general public, who would probably want me to shut up already at this point. Shrug, I'm just calling it the way I'm seeing it. Me, I'm going out to buy more energy income trusts to continue to hedge my petrol bills, which would of course be going up like everyone else's.

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