Government increases petrol duty with immediate effect

According to The Straits Times, drivers will have to pay more for petrol as the Government announced an increase in petrol duty rates today. There is a reprieve, however, as there will be a one-year road tax rebate.

Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said in his Budget speech that the rise in petrol duties is meant to encourage less car usage and reduce carbon emissions. Petrol duty rates have remained unchanged since 2003.

The duty for premium grade petrol will be raised by 20 cents per litre to 64 cents per litre, while that of intermediate grade petrol will be increased by 15 cents per litre to 56 cents per litre.

Mr. Tharman said pump prices after the petrol duty changes would remain lower than the levels seen in the last two and a half years as oil prices are falling. The changes that took effect today would yield about $177 million a year.

But he also had some good news for drivers: a one-year road tax rebate of 20 percent for cars, 60 percent for motorcycles and 100 percent for the small number of commercial vehicles using petrol.

The road tax rebate will offset about two-thirds of the impact of the petrol duty change on intermediate grade petrol for a typical car. The one-year road tax rebate will cost the Government $144 million.