The Competition Commission of Singapore has proposed the development of a web portal and mobile application to allow consumers to compare petrol prices.
There is no collusion among petrol retailers but prices can be more transparent, said the Competition Commission of Singapore (CCS) as it proposed the development of a platform to allow consumers to better compare prices. The commission said it will be working with relevant stakeholders, including petrol retailers, to develop a price comparison Web portal and/or mobile application, which according to a survey it conducted, could save motorists here $40 million a year.
This comes after it did a second inquiry into the petrol market. The findings were released on Tuesday (19thDecember).
A price comparison Web portal and/or mobile application with various retail petrol prices will, for instance, help consumers make more informed purchase decisions and encourage more transparent competition among petrol retailers, the commission said.
This is on the back of the potential entry of a fifth petrol retailer in Singapore, it added. The current four are Caltex, Esso, Shell and Singapore Petroleum Co (SPC).
The commission noted that those who monitor prices through comparison websites or mobile/tablet applications enjoyed even more discounts, compared with those who monitor prices through conventional means such as on-site displays or petrol retailers’ websites.
“Discount and rebate schemes are complicated and make price comparison difficult for consumers. If information on effective prices, that is, retail prices net of petrol discounts and rebates, was made simpler and available, consumers would be able to effectively compare prices and make more informed petrol purchase decisions,” it said.
“This would, in turn, facilitate a more price-competitive retail petrol market in Singapore, as petrol retailers would then be encouraged to offer better prices and promotions to attract consumers.”
The commission’s second inquiry into the petrol market started in February 2015, when the price of crude oil declined from US$115 a barrel in June 2014 to a low of US$46 in January 2015. Back then, the commission received feedback that retail petrol prices had not fallen in tandem with crude oil price declines.
The inquiry was conducted with input from petrol retailers, industry experts and motorists. Revealing its findings on Tuesday, the commission said petrol retailers differentiate their prices through the use of discounts.
It noted that while listed retail prices are similar, prices could be lowered by five percent to more than 20 percent with various discounts and rebates offered under loyalty programmes.
Thus, there is high brand loyalty among consumers, the inquiry found, where 58 percent of consumers surveyed did not switch petrol brands between 2012 and 2016. Only an average of one in five compared prices, the survey found.
The inquiry also said that there should be greater awareness among motorists about using the correct octane grades, as the survey showed that 63 percent of motorists in Singapore purchased a higher grade of petrol than needed for their vehicles.
Studies have shown that using a higher petrol grade than recommended by vehicle manufacturers does not optimise engine performance, said the commission. When contacted, Shell, SPC and ExxonMobil said they are studying the findings from the CCS.
A spokesman for ExxonMobil, which sells the Esso brand of fuels, said it is looking into how it can incorporate the recommendations. An SPC spokesman said pump prices at its service stations are in line with prevailing market conditions. “We monitor the market regularly and will periodically review and adjust prices and promotions to reflect market conditions and to offer competitive pump prices to the motoring public.”