Cheap diesel sold illegally at 'white pumps'

The Straits Times AsiaOne 29 Jun 14;

SINGAPORE - As many as 10 companies are selling diesel illegally at "white pumps" around Singapore, a Straits Times investigation has found.

Although the law states that only designated kiosks can sell fuel, the firms operate their side businesses with impunity from at least 15 locations in industrial estates.

Prices for their unbranded diesel are as low as $1.13 per litre, or about a third less than rates at stations owned by the likes of Shell, ExxonMobil, Caltex and Singapore Petroleum Company.

Diesel sold by the four oil companies is now at a record $1.71 per litre while their petrol prices range from $2.24 to $2.68 a litre.

Industry players said operators of white pumps - so-called because they sell unbranded fuel - can sell diesel at a discount because they do not incur the same costs faced by oil firms.

These include higher land cost of sites approved for fuel retail, infrastructure such as underground tanks, amenities such as toilets and air pumps, and advertising and marketing.

According to Urban Redevelopment Authority guidelines, only certain industries - such as those in transport-related fields - are allowed to set up their own diesel pumps. The fuel must be for their own use and cannot be sold to the public.

But The Straits Times had no trouble filling up at two white pumps - a furniture factory in Sungei Kadut and a bottled gas supplier in Woodlands.

The former required buyers to dial a number posted at the pump. A few minutes later, an attendant appeared, who even wrote a receipt for the diesel, which retailed at $1.19 a litre.

The latter, despite prominent signs warning that the public was not allowed to buy diesel at its site, had pump attendants on hand who were selling the fuel at $1.45 a litre.

In Tuas, a company called Sysma Energy openly advertises its product. Customers must apply for a chip-embedded tag to operate its pumps. Details of fuel dispensed, time and date are captured by Sysma's system, and customers are billed later. Sysma admitted that its diesel does not contain detergent and anti-foaming additives, which diesel sold at authorised pumps contains.

Caltex and Shell refused to comment on the white pump operators while ExxonMobil said it supplies fuel to a wide range of customers, including transport companies and industrial users.

"Due to anti-trust considerations, we are not in a position to monitor what they then do with the fuel," its spokesman said. The Ministry of Trade and Industry said the fuel market "is open to competition", but retailers are governed by the competition law, as well as "various regulations", such as those pertaining to safety.

The National Environment Agency said it "conducts surprise checks" on fuel retailers. In one recent check on three operators, the agency said their diesel met its stipulated cap on sulphur content and they bought their fuel from oil companies here.

The Consumers Association of Singapore said it supports competition in the fuel market as long as it is legal.

"We support anything that encourages competition," Case executive director Seah Seng Choon said. "Of course, we're talking about pumps that are properly managed to ensure fuel quality, safety and that the meters are properly calibrated."

Not all consumers are taken in by lower prices at white pumps.

Contractor Andy Goh, 45, said: "Even though some of them advertise that their diesel complies with Euro 5 (an emission standard), I don't feel safe. Their fuel quality is very different."

Cabby Victor Yow, 68, said: "There's no point, because Comfort (taxi operator ComfortDelGro) sells diesel at lower prices."
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