Responding to Mr Low Thia Khiang’s question in Parliament if petrol companies were profiteering at the expense of consumers, Minister of State for Trade and Industry, Dr Koh Poh Koon, said he did not think the companies, though they make profits, were doing that.
Reflecting further on his answer in his Facebook page Dr Koh said that, “it’s not easy for most people to understand petrol pricing.”
“Crude oil is unrefined. MOPS (Mean of Platts Singapore) price is the price of refined petroleum and is the internationally traded price for refined petroleum,” the MOS said.
“MOPS constitute less than 30% of the listed retail price of petrol. The other 70% comprises of costs of land tax, operating costs, petrol tax etc. So if MOPS price which mirrors Crude price drops by 50% but this only contributes to less than 30% of the final retail price, then the final retail price will only drop by (0.3 x 50%= 16%),” he explained why even though crude oils price drops by 50%, you see only 16% drop in pump price.
In trying to further simplify petrol pricing for Singaporeans, Dr Koh said that “it’s like saying yellow noodles is only one of the ingredients of fishball noodles so even if the price of the yellow noodles drop by 50%, you will not see the price of the entire bowl of noodles get sold for half its usual price!”