Singapore ‘cooks up’ petrol prices

Sunshine Coast Daily

Why has the Coast price of unleaded petrol soared from 98 cents per litre to $1.17 – way above the normal price cycle high?

Geoff Trotter of Fueltrac thinks it’s a “cook-up” by the oil companies in Singapore, because he can’t find any triggers in the currency exchange rate, refinery problems or spikes in demand to explain it otherwise.

And he said the evidence will show in “comfortable” profits down the track for Big Oil despite the current economic crisis.

“We reckon they (oil companies) have done an OPEC,” he said yesterday.

“The price of oil in Singapore shot up by about $A15 a barrel on January 14 – we think it’s a cook-up, a supply contraction by the oil companies in Singapore.

“We think they’ve cut production.”

Mr Trotter said there was no major change in demand locally.

“Before January 14 the price was barely above the crude price, so they have lifted the refining (profit) margin,” he said.

He said at least OPEC announced when it was cutting production.

In Australia, oil companies could be prosecuted for price collusion, but in Singapore “the anti-trust laws are very different”.

And the outlook isn’t bright as far as the price coming down again.

“Given their success I think they will maintain a tighter rein over supply,” Mr Trotter said.

He said OPEC members often broke ranks on production agreements but “maybe the Singapore boys are more tightly controlled than OPEC”.

Despite the ACCC on January 21 saying the price of unleaded petrol should remain under $1per litre for quite some time, the outlook is not rosy.

Mr Trotter said such words held little weight.

“The ACCC has no power on prices anywhere let alone in Singapore,” he said. Mr Trotter said the refinery price hike will impact on the profitability before the oil reached Australia, increasing their take substantially.

“If the oil company owns service stations in Australia it marks up 10 cents a litre at the refinery, another seven cents on the wholesale price, and about 12-15 cents on the retail price,” he said.

“They have been able to get themselves into a comfortable position.”

According to petrol price monitoring site, yesterday’s unleaded price was the highest in the last 30 days.

The December average price was 98c/litre, the highest price in the last 90 days was $126.5/litre and the highest price in the past 12 months was $161.5/litre in July 2008.

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