Diesel duty at pumps doubles to $0.20 per litre

In line with moving diesel taxation to the pumps to encourage responsible usage, Finance Minister Heng Swee Keat announced on Monday (18 February) that the excise duty on the fuel will be raised from $0.10 to $0.20 a litre with immediate effect.

At the same time, upfront taxes for diesel vehicles will be pared down further from where they were when diesel duty was first reintroduced at the pumps in 2017.

The annual Special Tax for diesel cars and taxis will be reduced further by $100 and $850 respectively from 18 February this year.

Owners of private diesel buses and goods vehicles will be granted new road tax rebates for a three-year period from 1 August this year to July 31, 2022.

A 100% road tax rebate will be granted in the first year, followed by 75% in the second year, and 50% in the third year. The new road tax rebate of 100% will apply for the period from 1 August this year to 31 July 2020.

Diesel school buses, and eligible diesel private-hire or excursion buses that ferry school children will receive additional cash rebates for the same three-year period. It will be $1,600 for school buses, and up to $1,800 for eligible diesel private-hire or excursion buses.

Ms. Tammy Tan, Spokesman for ComfortDelGro Corp, which has one of the largest diesel fleets here, said, "We will be passing on the entire savings resulting from the reduction in the annual Special Tax for diesel taxis to our drivers."

The savings will help offset a foreseeable increase in running cost. Taxi drivers and private-hire drivers using diesel vehicles will incur around $1,000 more a year if their driving patterns do no change. This is based on an average daily mileage of 300km and a fuel efficiency of 10km/L.

A private bus operator will incur around $2,000 more per full-size bus per year, based on an average mileage of 140km per day and a fuel efficiency of 2.5km/L. At $0.20 per litre, the duty on diesel is still less than half that for petrol.