A Singaporean In Australia

When prices are high, we worry about high cost of living. When prices are low, we worry about losing our jobs. There is no pleasing of man. Many used to tell me opportunities to get rich are few and far between. Now that a golden opportunity is staring at them right in the face, what would these people say? No money to invest? Not the right time to make a gamble in turbulent times? Oddly enough, when supermarket snacks are on a 10% discount, they instinctively stock up a lot so that they can grin enjoying their wise purchases in front of the TV when the price returns to normal yet reluctant to buy a few barrels of oil. Yeah, that will not be enough to make us rich when oil hits a peak in the future. At least it makes us richer, can't go worse than buying crunchies or moving metal.

My land and grow dream will have to wait. I told the Duchess of the Brook that will be a 10-year plan. My wife will be relieved to hear that. Duchess' comments were not too positive but she was too polite to call me crazy. It's important to tell as many people as possible about your dreams. The idea is that when you eventually garner enough affirmation of your insanity, it's time to start. Since Duchess learnt that I may be able to supply her good organic eggs, her stance soften a lot. I suspect she might even dump her son at my farm as a childcare and go out on honeymoon with the Duke during one school holiday. I could certainly make use of those energetic young hands. I got a slave in return for some organic eggs. That's not a bad deal.

Talking about cheaper petrol, as we know global crude oil price have been falling. Therefore, retail petrol prices have been dropping steadily for the past few weeks. This morning, I did a fill at $0.98/litre (after discount). It was $1.50 just 6 months ago. Just as I am writing this, the king of black gold land had upped the lorry and oil price spiked a few percent overnight. With so many people in this modern day with the ability to shake up the world with just a morning fart, the only certainty about the future of small fries like us is uncertainty. If anything is certain, retail petrol prices in Singapore will always been higher than Perth. Why am I so certain? Because there is no reason why it should be.

Confused?

Well, some time ago, Satki Yoda told the round table that Singapore is a large exporter of refined fuel to Australia. The bros laughed about it but Satki Yoda insisted he was serious. So I did a bit of reading and found that Satki Yoda actually knew his stuff outside his Black Vios. Australian prices for petrol and diesel (wholesale or retail) is actually closely linked to Singapore's price of unleaded petrol. In fact it is being used as a key petrol pricing benchmark for Australia. That means Australia's petrol prices will never be lower than Singapore's prices because no Australian fuel suppliers will import from Singapore to make a loss in sales here. On top of that, there will be a healthy margin as a commercial incentive for these suppliers. 

Take a cue from the above table. The red line is the price Australia is buying from Singapore. Shipping cost and taxes add a whooping 80% to the import price. Then wholesalers mark up another 10% or so. And retail suppliers takes another 10% margin on it (not shown in this chart). The final price that folks on the street like me will pay will be at least double the price Singapore sells to Australia. So if Singapore is able to export refined oil at $0.40 per litre to Australia today, why are our friends in Singapore, without the need to absorb thousands of kilometres of shipping costs, filling their tanks at $1.70 per litre at the kiosks today? As a Singaporean, I don't wish to attempt to know. Lest I get another one of those "Prices are pegged to inflation" kind of bullshit. What I do know for sure, every litre of fuel I pump into the tank in Perth will always be cheaper than Singapore, despite the fact there is absolutely no justification it should be. Singaporeans voted for this.