Pump prices down again, but CNG costs up

Fuel rates moving more closely in tandem with crude prices, say analysts
Christopher Tan, Straits Times 18 Jul 08;

PUMP prices fell for just the second time in 18 months yesterday, following a slip in crude oil prices.

Petrol rates dropped by four cents a litre while diesel slid by two. The decreases come a week after the first reduction since January 2007.

The latest falls followed a drop in crude prices. They tumbled below US$140 on Tuesday when news broke that the United States had more oil reserves than expected.

Industry watchers said pump prices seem to be moving more closely in tandem with crude prices now.

Consumers Association of Singapore executive director Seah Seng Choon said: 'Consumers will welcome such quick response. We believe oil companies are able to adjust pump prices promptly and the latest move shows that such action is possible.'

Mr Ng Weng Hoong, the editor of energy news portal EnergyAsia.com, said: 'It looks good for the oil companies. But remember, it will be equally fast when prices rise.'

A litre of 92-octane petrol now costs $2.173, while 95- and 98-octane go for $2.206 and $2.28 respectively before discount. Shell's V-Power and Caltex's Platinum, so-called ultra-premium grades, are now $2.399 and $2.396 respectively. Diesel is $2.013.

Meanwhile, prices of compressed natural gas (CNG) continue to rise, jumping more than 40 per cent in the last six months.

With this, the gap between CNG and petrol has narrowed considerably.

Mr Ng said prices of all fossil fuels are correlated in some way. 'Ultimately, all will have to move up,' he noted.

One kilogram of CNG at Smart Energy's Mandai station is now $1.73, about 50 cents higher than when it opened six months ago.

Smart Energy managing director Johnny Harjantho said this was because the cost of gas had soared.

Motorists who drive CNG cars are obviously not thrilled. Customer service officer Wong Chee Wei, who owns a bi-fuel Chevrolet Optra, said: 'It has been rising almost every week.'