Petrol duties raised for first time in six years


Motorists will now have to pay more at the pump, as petrol duties were raised for the first in six years yesterday.

Announcing the hike which took immediate effect, Deputy Prime Minister Heng Swee Keat said motorists will be given road tax and additional petrol duty rebates to help offset the higher costs.

The duty for premium grade (98-octane and above) petrol will be raised by 15 cents a litre to 79 cents a litre – a 23 per cent increase.

The duty for intermediate grade (92-octane and 95-octane) petrol will be raised by 10 cents a litre to 66 cents a litre, an 18 per cent hike.

Petrol duties were last raised in 2015 – by 20 cents a litre for premium grade petrol and 15 cents a litre for intermediate grade petrol – to encourage less car usage and reduce carbon emissions.

Mr Heng said the higher petrol duties are meant to encourage Singaporeans to reduce their vehicle usage as part of the country’s broader sustainability push, which includes measures to promote early adoption of vehicles.

Most of the expected revenue increase from the petrol duties will be given out through rebates for petrol and petrol-hybrid vehicles, he said, adding that around $113 million has been set aside to cushion the hike.

Motorcycles will get a 60 per cent road tax rebate for a year. Those who own bikes with an engine capacity under 400cc will get up to $80 of additional petrol duty rebate, depending on the engine capacity.

Taxis and private-hire cars will be given a 15 per cent road tax rebate for a year and $360 of additional petrol duty rebate over four consecutive months for ac-tive drivers.

Goods vehicles and buses will be given a 100 per cent tax rebate for a year, while cars using petrol will be given a one-year tax rebate of 15 per cent.

All road tax changes will apply for a one-year period from Aug 1 this year to July 31 next year.

For example, the owner of a mass-market sedan such as a 1,598 cc Hyundai Avante with a fuel consumption of 5.4 litres/ 100km would pay about $631 in road tax for the one-year period from Aug 1, as compared with the usual $742 a year – some $111 in savings.

Assuming that the vehicle uses intermediate grade petrol and clocks an annual mileage of 20,000km, the car owner’s additional fuel cost would be around $110, which would be offset by the road tax rebates for the year.

Both road tax and additional petrol duty rebates will be disbursed automatically to eligible recipients. The Land Transport Authority will release further details on the additional petrol duty rebates in April.

The rebate measures will help offset one year of petrol duty increases for taxis and motorcycles, and about two-thirds of petrol duty increases for commercial vehicles and cars, said Mr Heng.

In a Facebook post, he said raising petrol duty rates was one of the hard choices that had to be made in this year’s Budget.

The move builds on Singapore’s efforts over the years to reduce vehicular emissions, he said, adding: “The reality is that combating climate change will require difficult trade-offs in the years ahead.”

Motorcycle owner Muhammad Irsyad, 22, said raising petrol duties during the pandemic was harsh. “I can’t say I am not affected, but I would probably feel its impact only in the long run,” the full-time national serviceman added.

Marketing executive Cheryl Phua, 57, said the higher petrol duties may factor into her decision to switch to a more fuel-efficient vehicle. “Since petrol prices would be higher, I think I would consider a hybrid car for my next vehicle.”

Associate Professor Simon Poh of the National University of Singapore’s business school noted that sustainability is emerging as one of the Government’s long-term goals. “Hiking the petrol duty to discourage car usage and encourage drivers to switch to electric cars helps to promote a green environment. This is in line with Singapore’s intention to cooperate with other countries in combating climate change,” he said.

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