Commentary: Impact of petrol duty hike goes beyond immediate effect on cost of living
SINGAPORE: One of the most talked almost announcements from Budget 2022 delivered by Deputy Prime number Government minister and Finance Minister Heng Swee Keat on Tuesday (February 16) was the hike in petrol duties.
Virtually drivers are concerned with how much this could push button upward costs of driving.
Later on all, yesterday's mark-up mean petrol duties will hit a loftier this year at 79 cents for premium fuel and 66 for intermediate grade fuel.
READ: 'It'southward actually unfair': Commitment, ride-hailing drivers balk at petrol duty hike
MARGINAL Affect ON COST OF LIVING IN Immediate TERM
Truthful, drivers would be impacted but the effect may be varied.
For big privately owned vehicles (say 2.4 litres or more than), the increment would hateful about Due south$100 to Southward$150 extra a month (assuming 1,000 litres a month consumption).
If you drive for lifestyle rather than for your livelihood, this increase may be negligible compared to the toll of the auto, its almanac depreciation and where most season parking fees are in that range or more.
And thankfully, taxis, individual hirer drivers and motorcyclists (who make a bulk of nutrient deliverers) who use their vehicles for work will go rebates.
But the greater impact is the consequent decrease in vehicular emissions catalysed by this movement.
Drivers who feel the pinch may bulldoze less if they accept stiff public transport options. Drivers may also change their fuel choices.
The fact is premium fuel (which has higher octane component) produces more than pollutants and should exist discouraged.
The shift from a market share of almost 55 per cent in 2005 to near 25 per cent in 2017, in part due to pedagogy about fuel quality and in role due to the lower costs of intermediate-grade fuel, has already had a positive bear on on the environs and human health.
READ: Commentary: Singapore's oil and gas sector should comprehend transition to a green hereafter with confidence
This effect was further enhanced with the nix COE growth policy since 2018.
Raising 15 cents per litre on premium fuel will further penalise the utilize of a more polluting fuel versus 10 cents on intermediate fuels.
The price differential at the pump betwixt the ii types remains steady at near 50 to sixty cents per litre, which could shift drivers currently using premium to intermediate to buffer the impact.
LIMITED IMPACT ON PETROL INDUSTRY
Petrol companies will probable pass the increment in petrol duty in its entirety to the consumer instead of absorbing the taxation hike to use this pricing departure to proceeds market share, since the fight for market share has only short-term benefits, for instance, in relieving storage constraints at the refineries.
They are more likely to focus on enhancing brand loyalty with related discounts and promotions to maintain a long-term marketplace share stability.
Our oil industry will not be affected significantly. Only xx per cent of our local refinery production of petrol and diesel is for domestic apply. Growing regional demand for these fuels where automobile growth is not restricted will most likely soak upwardly the displaced volume.
READ: Commentary: Amidst low COE prices, here'due south why you should hold off buying a used auto
LIMITED Increment TO NATIONAL COFFERS
When DPM Heng said in his upkeep speech: "Usage-based tax has helped shape consumer behaviour towards a more than efficient utilise of fuel or environmentally friendly alternatives," I wondered if the petrol tax hike was an application of the nudge theory, an idea grounded in behavioural science.
Later on all, positive reinforcement and indirect suggestions tin can influence people's decisions and actions without them even realising it.
READ: Commentary: Car or car-less? All depends on the parents
The motivation for such an increase in petrol duty must be the greater potential touch on emission reduction than acquirement collection since most of the collected acquirement will be channelled to the consumer in terms of rebates to ease the transition for those relying on their vehicles for their livelihoods.
Petrol and diesel fuel pump sales have ballooned to ane,300 million litres per yr on average over the final decade.
Assuming lxxx per cent of that book to be petrol, then we are looking at approximately an additional S$115 one thousand thousand each year in recurring duties, which disappears quite quickly with the Southward$113 million worth of rebates also appear on Tuesday.
In curt, the rise in petrol duties will barely brand a dent on national coffers, at least in the short term while there are withal rebates.
(With new greenish targets announced past the Singapore Government, when volition we be seeing more than electric vehicles on our roads? And will town council and condominium committees get involved? The writer and a business professor weigh in on CNA's Heart of the Affair:)
NUDGING MORE SUSTAINABLE LIFESTYLE CHOICES
A secondary intent may be in promoting the transition to electrical vehicles with charging infrastructure development, if public transportation is less of a suitable substitute.
In prodding Singaporeans to adopt more than conscious lifestyle choices aligned to our national vision of a Green Singapore, other behavioural changes that should be encouraged include fugitive peak hour jams (which burns at least ii to three times more fuel), reducing average driving speed, less aggressive driving, and timely car maintenance.
An efficient public ship system volition also be a fundamental enabler.
Consumer behaviour is an important lever in our fight against climate change. If consumers are not focussed on sustainability, the environmental benefits from investments in new light-green technologies and progressive green policies will never be fully realised.
READ: Commentary: Why Singapore is ripe for an electrical vehicle revolution
MAKING ELECTRIC VEHICLES More than ATTRACTIVE
Every bit Singapore marches towards the 2040 goal of phasing out of petrol vehicles, there will be less petrol duty collected albeit with a positive bear on to the surround.
The question on everyone's heed then may be how the government would supplement the diminished recurring revenue from petrol duty. Would this be through an increase in carbon taxes?
The increase in petrol duty as well makes driving electric vehicles more than attractive, where the price of electrons can range from approximately 17 to 24 cents per kWh when charging at dwelling to 55 cents per kWh when charging at public outlets provided by Shell Greenlots, or even lower at SP Group and eventually future Accuse+.
That means South$35 at 55 cents per kWh for a full electrical car bombardment of 64kWh for a travel distance of 350 to 400km depending on your driving style and use of air-conditioners.
This is good news when extensive lifecycle analysis have shown that EVs contribute a third of the greenhouse gases a comparable vehicle with an internal combustion engine does. This figure improves with a greener electricity grid.
Fifty-fifty in Singapore, with 95 per cent of our electrical filigree on natural gas, EVs will still help to reduce our greenhouse gas emissions.
READ: Commentary: Electric vehicles will take over Singapore. But here's what must happen first
READ: Amongst push for electrical vehicles, getting charging points installed in condominiums remains a challenge
For these reasons, I am besides hearted past the appear S$30 meg fund to develop Singapore's EV charging infrastructure evolution efforts.
In Singapore's shift towards a greener economy, nosotros will need to go along our eye on juggling various sustainability assurance to deliver bear on.
Nosotros will need more than behavioural nudges to reduce emissions by the transport sector which, for the record, has already started its bold transformational journey.
Dr Sanjay C Kuttan is council member at the Sustainable Energy Association of Singapore and Chair of the Sustainable Infrastructure Committee.
hooverconesee1936.blogspot.com
Source: https://cnalifestyle.channelnewsasia.com/commentary/commentary-impact-petrol-duty-hike-goes-beyond-immediate-effect-cost-living-300011
0 Response to "Commentary: Impact of petrol duty hike goes beyond immediate effect on cost of living"
Post a Comment