In a surprising turn of events, gasoline prices in Singapore have seen a drop for the first time in nearly three weeks. Shell, one of the leading retailers, has become the pioneer in cutting its rates.
As of Wednesday afternoon, Shell was selling 95-octane petrol at a 1.44% reduced rate, which translates to SGD3.42 (US$2.67) per liter. This move has set them apart from other companies such as Caltex, Esso, and Sinopec which have opted to maintain their rates at SGD3.47. Despite the reduction in petrol prices, Shell has increased its diesel price by a significant 5.3%, hiking it up to SGD3.93.
Global Oil Prices and International Relations
Interestingly, this development has coincided with a fall in global oil prices. The Brent benchmark, for instance, slipped below $100 at the time of writing. This was largely attributed to an announcement from Iran stating that “non-hostile vessels” could safely navigate through the Strait of Hormuz, provided they liaised with its authorities.
Simultaneously, U.S. President Donald Trump has reversed his earlier threats aimed at Iran’s power grid. He recently stated that the U.S. and Iran had engaged in “very good and productive” conversations.
Trends in Diesel Prices
According to Tom Kloza, a prominent energy adviser at Gulf Oil, diesel prices have been climbing at a steeper rate than petrol prices. This is party due to a squeeze on supply, even before any conflict. He stated, “The world was well supplied with petrol on Feb 28, but it was not well-supplied on these middle distillates like diesel, gasoil, marine fuel, and jet fuel.”
Questions & Answers
Why did Shell reduce its petrol prices?
Shell reduced its petrol prices due to the recent fall in global oil prices.
Why have diesel prices been climbing faster than petrol prices?
Diesel prices have been rising faster than petrol prices due to a tight supply of diesel and other middle distillates like gasoil, marine fuel, and jet fuel.
What was the reason behind the recent drop in global oil prices?
Global oil prices fell after Iran assured the safe passage of “non-hostile vessels” through the Strait of Hormuz, given they coordinated with Iranian authorities. This, coupled with U.S. President Donald Trump stepping back from threats to target Iran’s power grid, eased tensions and led to the drop in oil prices.
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