Is Cartel job on fuel allowed in Singapore?

HyuugaNeji SG

On 29 Jan

It’s the Lunar New Year Season and I hope you haven’t spent too much on oranges and pomelons as now, you have to pay for more petrol! As of 2100 hrs on 29 Jan 2009, we can confirm that all 4 petrol companies have INCREASED petrol pump prices for all petrol grades in the following order:

Shell - 12pm
ExxonMobil - 2pm
Caltex - 3pm
SPC - 5.30pm

On 6 Jan

January 6th, 2009

We hate to break this to you but we have to. Shell has increased it’s petrol prices by 4 cents! As of 1630 hrs on 6 Jan 2008, we can confirm that Shell has INCREASED petrol & diesel pump prices for all grades.

January 7th, 2009

After Shell’s increase of fuel prices yesterday afternoon, Caltex, ExxonMobil and SPC have followed suit! As of 1100 hrs on 7 Jan 2008, we can confirm that Caltex, ExxonMobil and SPC have also INCREASED petrol & diesel pump prices for all grades in the following order:

Shell - 3.30pm (6 Jan)
ExxonMobil - 4.45pm (6 Jan)
Caltex - 11pm (6 Jan)
SPC - 10am (7 Jan)

HyuugaNeji SG

Actually i don’t understand why the rest of petrol brands follow Shell to increase their prices too.

Lets say if only Shell increase their price and not the other 3 brands. What will happen??

I am die cock sure that, a lot lesser drivers will pump with Shell as their price are higher.
More drivers will pump with the rest of the 3 brands.
Meaning to say each Brand will have a bigger share of their usual pie. By having a bigger pie now, i am sure the end profit is going to be more than the 5-7cents increment if they don’t follow Shell.

I don’t believe the Petrol Companies don’t understand this theory.
But Why aren’t they doing that?
Do the Petrol Companies already have agreement control the price?

Its a Cartel job for sure.. CASE should do some audit & look into these Petrol companies.

Cartel is illegal in Singapore.

quoted from http://www.petrolwatch.com.sg/news/archives/181/update:-fuel-price-changes.html

maurizio13 SG

Oligopoly, tacit price collusion & price leader.

maurizio13 SG

Tacit collusion occurs when cartels are illegal or overt collusion is absent. Put another way, two firms agree to play a certain strategy without explicitly saying so. This is also known as price leadership, as firms may stay within the law but still tacitly collude by monitoring each other's prices and keeping them the same. Usually, this occurs when a firm emerges to set the general industry price and other firms follow suit. Oligopolists usually try not to engage in price cutting, excessive advertising or other forms of competition. Thus, there may be unwritten rules of collusive behavior such as price leadership (tacit collusion). A price leader will then emerge and sets the general industry price, with other firms following suit. For example see the case of British Salt Vs Salt Union (Competition Commission report which concludes price leadership and a lasting collusive agreement between the two firms).

http://en.wikipedia.org/wiki/Price_leadership

For an in depth discussion on game theory, you can PM charlize.

HyuugaNeji SG

The price of fuels has became a big issue now. It is even posted in stomp. Do comment on it.

http://singaporeseen.stomp.com.sg/singaporeseen/viewContent.jsp?id=55039