SINGAPORE: Singapore will not reduce or suspend fuel duties or provide road tax rebates despite the recent increase in pump prices, Finance Minister Lawrence Wong said on Monday (Apr 4), adding that these measures effectively amount to a subsidy on private transport and will have "counter-productive effects".
"Fewer than four in 10 households in Singapore own cars, and amongst the lowest quintile, only about one in 10 do ... Such subsidies on private transport would therefore benefit a relatively small but generally better-off group," Mr Wong told Parliament in a ministerial statement on inflation and business costs.
"Cutting fuel duties also means that some of the subsidies will flow back in part to producers and suppliers themselves, not just to consumers, as the pump price may not fall as much as the reduction in duty.
"More importantly, such subsidies will reduce the incentive to switch to more energy-efficient modes of transport, which is a critical element in our plans for sustainable living."
Pump prices in Singapore have risen to record levels in recent weeks, amid a spike in global crude oil prices caused by a supply crunch and the war in Ukraine.
New Zealand said on Mar 14 that it will reduce fuel excise tax and halve public transport fares for three months to help offset the surge in petrol prices caused by Russia's invasion of Ukraine.
In Singapore, Mr Wong highlighted that the country collects fuel duties and road taxes for revenue, and also to price the negative externalities of vehicle transport, such as the impact on public health and the environment.
Fuel duties collected averaged S$920 million a year over the last five years, and revenue from these duties and taxes adds to the pool of resources available for various programmes and subsidies that "directly benefit" Singaporeans, he said.
Mr Wong noted, however, that some groups, like taxi and private-hire car drivers, as well as delivery riders, are particularly affected by the increase in petrol and diesel prices.
"Various taxi and private-hire car operators have implemented temporary increases in fares to help cushion the higher fuel prices for drivers, and to have consumers share the burden," he added.
"They also have tie-ups with petrol companies to offer fuel at discounted prices, to help drivers and riders manage higher fuel costs."
Those whose incomes are impacted and are in need of financial assistance can approach the social service officers, community centres or self-help groups, Mr Wong stated.
The minister said the "better way" to help Singaporeans cope with the rise in petrol prices, as with inflation in general, is to provide them with the support measures detailed in Budget 2022.
They include the S$100 CDC Vouchers for every Singaporean household and rebates for Service and Conservancy Charges and utility bills - measures that will be brought forward where possible.
"Through these measures, we are extending concrete, tangible help directly to Singaporeans to cope with their different areas of needs, including their utility bills, children’s education, and daily essentials, and we are providing more targeted help for the lower-income groups," he said.
"We will continue to monitor the external situation, and the risks for our economy closely – risks both in terms of growth and inflation.
"As the Government has assured this House previously, if the situation worsens, we will not hesitate to take further actions to protect jobs, and to help households and businesses deal with the increased costs."
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"Fewer than four in 10 households in Singapore own cars, and amongst the lowest quintile, only about one in 10 do ... Such subsidies on private transport would therefore benefit a relatively small but generally better-off group," Mr Wong told Parliament in a ministerial statement on inflation and business costs.
"Cutting fuel duties also means that some of the subsidies will flow back in part to producers and suppliers themselves, not just to consumers, as the pump price may not fall as much as the reduction in duty.
"More importantly, such subsidies will reduce the incentive to switch to more energy-efficient modes of transport, which is a critical element in our plans for sustainable living."
Pump prices in Singapore have risen to record levels in recent weeks, amid a spike in global crude oil prices caused by a supply crunch and the war in Ukraine.
New Zealand said on Mar 14 that it will reduce fuel excise tax and halve public transport fares for three months to help offset the surge in petrol prices caused by Russia's invasion of Ukraine.
Related:
In Singapore, Mr Wong highlighted that the country collects fuel duties and road taxes for revenue, and also to price the negative externalities of vehicle transport, such as the impact on public health and the environment.
Fuel duties collected averaged S$920 million a year over the last five years, and revenue from these duties and taxes adds to the pool of resources available for various programmes and subsidies that "directly benefit" Singaporeans, he said.
Mr Wong noted, however, that some groups, like taxi and private-hire car drivers, as well as delivery riders, are particularly affected by the increase in petrol and diesel prices.
"Various taxi and private-hire car operators have implemented temporary increases in fares to help cushion the higher fuel prices for drivers, and to have consumers share the burden," he added.
"They also have tie-ups with petrol companies to offer fuel at discounted prices, to help drivers and riders manage higher fuel costs."
Those whose incomes are impacted and are in need of financial assistance can approach the social service officers, community centres or self-help groups, Mr Wong stated.
Related:
The minister said the "better way" to help Singaporeans cope with the rise in petrol prices, as with inflation in general, is to provide them with the support measures detailed in Budget 2022.
They include the S$100 CDC Vouchers for every Singaporean household and rebates for Service and Conservancy Charges and utility bills - measures that will be brought forward where possible.
"Through these measures, we are extending concrete, tangible help directly to Singaporeans to cope with their different areas of needs, including their utility bills, children’s education, and daily essentials, and we are providing more targeted help for the lower-income groups," he said.
"We will continue to monitor the external situation, and the risks for our economy closely – risks both in terms of growth and inflation.
"As the Government has assured this House previously, if the situation worsens, we will not hesitate to take further actions to protect jobs, and to help households and businesses deal with the increased costs."
Continue reading...