Singapore Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam has announced a dreadful news for vehicle owners in his Budget 2015 speech on Monday (Feb 23) – petrol duty hikes. Effective yesterday (Feb 24), the tiny island’s petrol will be pricier by S$0.20 (US$0.16, £0.10, RM0.53) for a litre of 98-octane grade petrol and by S$0.15 (US$0.12, £0.07, RM0.40) for 95-octane and 92-octane grade petrol.
The good news – vehicle owners will enjoy a one-year road tax rebate. The rebate will be 20% for cars, 60% for motorcycles and 100% for commercial vehicles that use petrol. Hence, from Aug 1, 2015 to Jul 31, 2016, the 1-year rebate is worth about S$149 (US$119, £71, RM398) for a 1,600cc car using intermediate-grade petrol, offsetting about two-thirds of the petrol duty hike.
For petrol-driven motorcycles, the 60% rebate will reduce payable road tax from S$280 (US$224, £133, RM747) to S$112 (US$89, £53, RM299). Commercial vehicles will pay zero road tax during the 1-year period, of course. No matter how you see it, the Government of Singapore wins again, milking more money from vehicle owners in a country where cars are the most expensive in the world.
With the latest petrol duty hikes, the Government of Singapore will be richer with cool profits of S$0.64 (US$0.51, £0.30, RM1.71) and S$0.56 (US$0.45, £0.27, RM1.49) for every litre of premium and intermediate-grade petrol respectively. While the 1-year rebates are expected to cost the government S$144 million, the hike in petrol duty is estimated to bring at least S$177 million a year for Lee Hsien Loong administration.
However, something strange happens since Tuesday night. Petrol companies shifted to high gear in profiteering, charging more than the petrol duty rates announced by the government. Shell charges S$2.28 a litre for 98-octane-grade petrol – S$0.25 more than on Monday. Other brands also adjusted their prices – Caltex, Esso and Singapore Petroleum Company (SPC) are charging S$2.25, S$2.23 and S$2.20 respectively – an increment between S$0.17 and S$0.21.
For the popular 95-octane-grade petrol, Shell raised the price by S$0.18 to S$2.04 per litre. The other three brands raised their prices to S$2.01 or S$2.02 – with the increases ranging between S$0.12 and S$0.16. Almost immediately, Consumers Association of Singapore (CASE) sprang into action. But considering how the toothless consumer watchdog took ages to deal with a scammer Jover Chew, the most CASE could do is merely – barking.
Amusingly, Tharman Shanmugaratnam said on Monday the increase in petrol duties, which have remained unchanged since 2003, will “encourage less car usage and reduce carbon emissions”. But critics saw it as lame excuses since the Carbon Emissions-Based Vehicle Scheme was in place since January 2013. And why there was no hike in diesel tax although such cars are carbon emitters too?
Ahh, it would be disastrous if the government plays a fair game by increasing diesel duty as well since commercial vehicles use diesel. It seems while the Government of Singapore is too greedy milking every penny from Singaporeans, they are also smart enough not to offend too many voters. Mr Tharman also claimed that with falling oil prices, pump prices after the duty hikes would remain lower than the levels in the past two-and-a-half years.
But here’s the hidden problem with such lame excuses. Ignorant Singaporeans may not realise it but the road tax rebates is a one-off goodies that is valid for one damn year only. The petrol consumers will continue to pay the (higher) new petrol tax for many years to come. And what will happen when the global oil price goes up? Answer – consumers would be paying even higher prices for both “oil prices and petrol tax”.
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