Sunday, 24 May 2015

There is little or no benefit from using the 98-octane grade

Lower-grade fuel still the top draw

A Caltex station in Lorong Chuan. Industry watchers expect motorists to continue favouring lower-octane fuel as they realise there is little or no benefit from using the 98-octane grade here. -- ST PHOTO: ONG WEE JIN

MOTORISTS are sticking with lower-octane petrol despite a drop in pump prices in the past year.
Industry figures showed that 92- and 95-octane fuel accounted for 66.3 per cent of the total volume of petrol sold last year.

In the first quarter of this year, that share dipped to 65.5 per cent - but this was comparable to figures in 2012, when petrol pump prices ranged from $2.11 to $2.51 a litre before discount.
Petrol prices have been sliding since then. In January this year, before the Government raised petrol duties, petrol prices ranged from $1.75 to $2.24 - their lowest in six years.

Now, they hover between $2.15 and $2.75. This is largely due to the higher petrol duties, which were jacked up in February by 15 cents for non-premium grades and 20 cents for premium grades.
Crude oil prices have also risen since, with the Brent now trading at around US$66 a barrel, up from US$55 in January.

Industry watchers expect the consumption trend to remain in favour of lower-octane fuel because motorists now realise there is little or no benefit from using the 98-octane grade here.

This, however, was not the case 10 years ago. In the mid-noughties, 92- and 95-octane fuel accounted for less than 45 per cent of the market. Before 2000, their share was merely 20 per cent or so.

Businessman Leslie Chia, 50, said he uses 95-octane fuel for his cars, including a Maserati.
"Contrary to what people think, there is no need to use 98... My mechanic at Hong Seh (Maserati agent) says 95 is good enough," he said.

"It is only when I go to Malaysia that I pump 98, but that is because foreigners are not allowed to buy the lower grades there."

Automobile Association of Singapore chief executive Lee Wai Mun said: "You don't need to go for 98. In most countries, they use 92. Singapore's terrain is quite flat, and you don't need the extra boost to climb steep inclines."

Independent oil industry consultant Ong Eng Tong said: "High-octane fuels have a higher benzene content. Benzene has been linked to serious illnesses, such as leukaemia."

That said, Singaporeans are still resistant to using 92, the lowest octane, which makes up less than 7 per cent of sales. Observers cite the relatively small price gap between 92 and 95 (four cents a litre).

The gap between 95 and 98 is at least 20 cents.