Singapore Budget 2015: 3 Things Drivers Should Know

Singapore Budget 2015: 3 Things Drivers Should Know

OneShift Editorial Team
OneShift Editorial Team
04 Mar 2015

It is common knowledge that the climate is changing and not for the better. As a growing and developing nation, we are consuming and emitting more carbon than ever. To address the issue, the government came up with the National Climate Change Strategy (NCCS) in 2008. The NCCS was a result of the cooperation between the various governing bodies; namely the National Environmental Authority (NEA) and the Ministry of Environment and Water Resources (MEWR). The purpose of the NCCS was and still is to tackle the threat of climate change, which also includes efforts at mitigation. Effective mitigation means cutting emissions, and an assessment that states that global emissions need to be cut by fifty percent from 1990 levels by 2050, with absolute cuts from 2020 onwards, if the world is to have a fifty-fifty chance of avoiding 'catastrophic' climate change.

The Cost Of Climate Change

In the 2015 Budget speech which was delivered on the23rd of February, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam announced an increase in the petrol duty rates, which previously had been unchanged since 2003.

The increase is meant to encourage less usage of cars which, in turn reduces the emission of carbon. The duty for premium grade petrol has been raised by 20 cents per litre to 64 cents per litre, while that of intermediate grade petrol was increased by 15 cents per litre to 56 cents per litre.

The increase, while significant, still sees pump prices remain lower than the levels seen in the last two and a half years. According to Mr Tharman, the increase is projected to yield close to $177 million annually.

The Rebate Factor

A one-year road tax rebate - 20 per cent for cars, 60 per cent for motorcycles and 100 per cent for commercial vehicles using petrol - will be provided to ease the transition to the higher duties. The rebate will offset about two-thirds of the impact of the petrol duty hike on car-owners using intermediate grade petrol. The rebate will cost the Government S$144 million.

The fallout following the new budget was swift. There was the expected sense of outrage from those who were up in arms with the new policy. A sense of indifference also permeated from a section of motorists, with some stating that despite the increased duty, they would not consider reducing the usage of their vehicles.

A Fine Line Between Biz Smarts and Profiteering

The most glaring and pertinent effect were the practices of several petrol companies that increased their prices above the levy hike. The blatant capitalistic move riled many and it led to accusations of profiteering from the Ministry of Trade and Industry and Competition Commission of Singapore as well as consumer watchdog CASE .

On the 24th of February, a day after the announcement, a litre of 98-octane-grade petrol at Shell cost S$2.28 which was S$0.25 more than on Monday. Other brands also adjusted their prices, with Caltex, Esso and Singapore Petroleum Company (SPC) charging S$2.25, S$2.23 and S$2.20, respectively. The increment ranged between S$0.17 and S$0.21 for the three brands. This of course was not in accordance to the parameters set by the Government.

In response to this, the Ministry of Trade and Industry and Competition Commission of Singapore demanded that the accused explain their increases and in a joint statement released on the 25th, said that they “will not hesitate to take firm action against parties who are found to be engaging in anti-competitive behaviour at the expense of consumers”.

Those involved in the inquiry cited a number of reasons for their increase .These include crude oil prices, exchange rates, manufacturing and production costs from crude oil to fuel, the distribution costs of bringing the fuel to retail sites, operating costs of running service stations, and goods and services taxes.

At the time of publishing it was still unclear if or any measures were to be taken against the parties involved.

There are aspects that of this policy that will not please everyone but the measure to promote a greener and more eco-friendly Singapore, is undoubtedly to be commended

Credits: Shain Parwiz

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