Pump prices have fallen for the second time in two weeks, taking a litre of petrol to below $2 for the first time in several years.
Petrol falls below $2 a litre The price of 95-octane petrol slipped to $1.99 a litre across all brands PHOTO: ST FILE

Pump prices have fallen for the second time in two weeks, taking a litre of petrol to below $2 for the first time in several years.

Latest updates by fuel price tracker Fuel Kaki - managed by the Consumers Association of Singapore - showed that the price of 95-octane petrol, the most popular grade here, had slipped $0.05 lower to $1.99 a litre across all brands.

This was down from $2.04 last week, when fuel retailers lowered prices by five to six cents a litre following the crash in oil prices. The cheapest petrol, the 92-octane grade, is now $1.95 a litre across the board, except for Shell and Sinopec, which do not offer this grade.

The 98-octane grade varies from $2.33 at SPC to $2.47 at Caltex. So-called special grades by Shell and Sinopec are retailing at $2.60 and $2.50, respectively. All prices are before discounts.

Observers reckon the latest $0.05 cuts translate to a 20% to 25% reduction in wholesale fuel prices, which in turn follow the recent drop in crude oil rates. Wholesale fuel is estimated to currently account for only 15% of the cost of a litre of petrol here.

Meanwhile, diesel remains unchanged at $1.64 at SPC, and $1.67 elsewhere. Oil Consultant Ong Eng Tong said this may be because demand for diesel has been relatively buoyant, given that buses and goods vehicles are still running, while cars are being used less now with the circuit breaker.

Mr. Ong noted that West Texas Intermediate (a benchmark crude) "has risen due to paper trade". "We have to watch 21 May 2020, when the June contract expires," he said. "Like April 21, when the May contract expired and buyers cannot take delivery because of full inventory, we may see another dive - but maybe not below zero again."

Mr. Ong also pointed out that most countries around the world are still in lockdown, and that demand for jet fuel is "still at standstill". The last time more than one grade of petrol was retailing at below $2 here was in 2015, before petrol duty was raised.