Last Tuesday, the Competition Commission of Singapore (CCS) announced it was considering developing a platform – likely to take the form of a mobile app, Web portal or both – to help motorists compare petrol prices and make better-informed purchases.
This follows an inquiry by the CCS into the petrol market after it received feedback in 2015 that petrol prices had not fallen in tandem with a drop in crude oil prices.
Echoing the findings of an earlier study in 2011, the inquiry – conducted between 2015 and this year – found no evidence of long-rumoured collusion among petrol retailers here.
Instead, it found that price changes among retailers did not always match, and that when prices converged, it could be a result of retailers monitoring and reacting to their competitors’ prices.
The CCS did, however, note a greater need for transparency in retail petrol prices, something its platform is aimed at addressing.
While there are other websites and applications that allow motorists to compare petrol prices, the commission said the existing options do not provide easily comparable “complete and real-time updates” on petrol price changes and applicable discounts.
Such a platform would undoubtedly benefit motorists here, but it is hard to say whether being able to compare prices will, in fact, motivate them to switch to cheaper brands.
According to the inquiry, six in 10 motorists had not switched petrol brands in the last five years.
This brand loyalty comes from reasons such as convenience, as well as loyalty programmes and credit card discounts or rebates associated with their brand of choice.
The inquiry also found that 63 percent of motorists purchased a higher – and more expensive – grade of petrol than necessary for their vehicles, based on the perception that higher grades are better.
As such, it remains to be seen whether the proposed platform will, in fact, help motorists achieve the $40 million annually in savings from comparing prices that the CCS estimates they will.