Singapore Competition Commission Opens Market Inquiry Into Retail Petrol Industry.
Legal News & Analysis – Asia Pacific - Singapore – Competition & Antitrust
2 June, 2015
The Competition Commission of Singapore (“CCS”) has asked four petrol companies – namely, Shell, Chevron, ExxonMobil, and Singapore Petroleum Company (“SPC”) to provide information relating to recent revisions in petrol prices. This follows publicised statements made by the Consumers Association of Singapore (“CASE”) suggesting that the price increases could be profiteering.
All four companies had raised their pump prices a day after the Government announced hikes in petrol duty rates, in its Budget statement on 23 February 2015. The duty for premium grade petrol was raised by SGD 0.20 per litre (to SGD 0.64 per litre), while that of intermediate grade petrol was increased by SGD 0.15 per litre (to SGD 0.56 per litre), with effect from their date of announcement.
On 24 February 2015, pump prices for the four companies were reportedly raised by up to SGD 0.25 per litre for 98-octane-grade petrol, and as much as SGD 0.18 for 95-octane-grade petrol. CASE sent letters to all four companies asking them to justify the price adjustments, and subsequently stated that it found the replies received from SPC and Chevron provided valid reasons for the increase.
Previously, in May 2011, CCS published a market study report titled “An Inquiry into the Retail Petrol Market in Singapore”, which examined the dynamics and competitiveness of Singapore’s retail petrol market.
While the study found that the structure of Singapore’s retail petrol market contained risks of collusion or coordination between competitors, it also concluded that the regulatory regime was generally pro-competitive, and that petrol prices in Singapore over the period of the market inquiry appeared to be competitive by international comparison.
CCS also stated that it will continue to monitor developments in the sector and will initiate an investigation if material new information suggests that petrol players have infringed the Competition Act (Cap. 50B).