The recently announced increase in diesel duty is expected to have a negligible impact on public transport fares

The increase in diesel duty will have a negligible impact on public transport fares.

This will be the case despite the fare formula having a specific component that takes into account changes in fuel and energy costs, observers said, referring to the latest 10-cent increase in diesel duty to 20 cents a litre, which took effect on Monday.
Singapore University of Social Sciences' transport economist Walter Theseira said the excise duty hike "is less than 10 per cent of retail diesel prices", and added that the energy index is "only 10 per cent of the fare formula".
Associate Professor Theseira also said the energy index is split between electricity prices and diesel cost, and this further dilutes the impact of the increase in duty.
"Overall, I would say that the excise tax impact on fares through the formula would be minimal," he said.
The Land Transport Authority (LTA) said yesterday that the various tax rebates announced on Monday to cushion the impact of the diesel duty hike "will not apply to public bus services operating under LTA's contracts".
These include bus services run by SBS Transit, SMRT, Tower Transit and Go-Ahead.
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"Separate arrangements will be made with these bus operators under the provisions of the contracts," the LTA said, without elaborating.

This will be the case despite the fare formula having a specific component that takes into account changes in fuel and energy costs, observers said, referring to the latest 10-cent increase in diesel duty to 20 cents a litre, which took effect on Monday.

Singapore University of Social Sciences' transport economist Walter Theseira said the excise duty hike "is less than 10 per cent of retail diesel prices", and added that the energy index is "only 10 per cent of the fare formula".

Associate Professor Theseira also said the energy index is split between electricity prices and diesel cost, and this further dilutes the impact of the increase in duty.

"Overall, I would say that the excise tax impact on fares through the formula would be minimal," he said.

The Land Transport Authority (LTA) said yesterday that the various tax rebates announced on Monday to cushion the impact of the diesel duty hike "will not apply to public bus services operating under LTA's contracts".

These include bus services run by SBS Transit, SMRT, Tower Transit and Go-Ahead.

"Separate arrangements will be made with these bus operators under the provisions of the contracts," the LTA said, without elaborating.