I did not have access today’s paper in print, but a glance at the online version seemed to send a very (in fact, very, very, very… you get what I mean) strong message to all commuters – take public transport else you’d be paying a heavy premium to move around. The main factor in this is largely due to the tremendous hike in fuel prices, which made it less affordable to maintain a car. Although the price of COEs have taken a dip, the constant increase in fuel prices have kept potential buyers on the hold.

With pump prices heading north, motorists here are switching to cheaper alternatives.

Some have given up their cars and moved to public transport. Others have downgraded to smaller cars or two-wheelers. A growing number have opted for hybrid-engine cars.

There’s even a six-month waiting time for those who are keen to kit their cars out to run on compressed natural gas (CNG) because of a sudden surge in demand, according to motor workshops.

There were 248 CNG cars on the roads last year, but this has more than doubled to 538 in April this year.

Hybrid cars, or those that switch between petrol and electricity, also shot up in the same period, going by the Land Transport Authority’s numbers. Another 289 have joined their ranks, bringing the total to 1,346.

Another popular ‘green’ choice is public transport. Singapore’s total bus and train ridership hit a record 4.78 million rides a day in the first three months of this year.

The number of bids for certificates of entitlement (COEs) every month has also fallen since the beginning of this year, one more indicator that consumers are staying away from buying new cars.

COE bids for cars up to 1,600cc, for instance, fell from 3,005 bids in February to 2,500 this month.

‘People are very cautious about buying big-ticket items now, with oil and food prices going up and property prices and shares moving down. They’re adopting a wait-and-see approach,’ said Tan Chong Motors’ marketing director A.C. Neo.

If they do buy, says the Nissan distributor, small is in.

Borneo Motors, which sells Toyota cars, has also been selling more of its smaller capacity cars than its larger ones, said customer relations general manager Angeline Tan.

Another popular choice now is off-peak cars with the distinctive red plates. They can be driven from 7pm to 7am on weekdays, after 3pm on Saturdays and all day on Sundays and public holidays.

There are about 34,000 of them on the road now, compared to 2,644 just five years ago.

Mr Henry Ang, manager of car dealership Koh Brothers Automobile, said that he has seen a 20 per cent increase in the number of motorists who have switched from regular cars to off-peak cars to save money.

Petrol prices last went up two weeks ago, the 12th consecutive hike since last July. This brings pump prices here to between $2.153 and $2.386.

If you drive a 1,600cc car, that means you pay about $320 a month for petrol, going by the average distance covered. This is $70 more than the $250 you would have paid this time last year.

That bill is likely to go up as analysts expect petrol prices to hit $3 a litre here if oil prices reach US$200 (S$273) a barrel.

But energy consultant Ong Eng Tong of Mabanaft International said that he expects pump prices to end the year closer to $2.50 instead, which is about US$150 per barrel.

‘Drivers will pay maybe $50 to $100 extra a month and this is discretionary income,’ he said.

dawntan@sph.com.sg

Of course, besides encouraging people to take public transport, the papers also highlighted the probability of switching over to hybrid cars. These cars primarily run on 2 sources of energy – petrol and either CNG or electricity. While CNG may be cheaper (correct me if I am wrong), the pittance number of CNG refueling stations doesn’t make it an attractive option. I’m not even sure on the options of running on electricity. =P

To Mr Bernard Chew, ‘hybrid’ does not mean an orchid but his Toyota Prius, which has two engines: one petrol-driven, the other electric.

Mr Chew, 42, chief information officer at NTUC FairPrice, had predicted petrol prices would keep going up.

He put his money where his mouth is, and bought the fuel-sipping Japanese hybrid car for $85,000 in January last year.

He is glad too that his ‘green’ Prius is less pollutive. But the big plus for him is the fuel-saving factor.

A hybrid car is able to get more mileage because it uses its electric motor in stop-go traffic, and the petrol engine kicks in only when the car is cruising.

‘My Prius gets about 25km per litre,’ Mr Chew said.

A non-hybrid saloon like the Toyota Corolla averages around 13km per litre while a Honda Civic does about 11km per litre. The Toyota Prius goes for at least 17km to more than 20km per litre.

Because he is often on the road – about 2,000km each month – Mr Chew finds himself spending less now on fuel: about $160 each month.

His previous car, a Toyota Wish, cost him about $400 in monthly fuel costs.

Mr Chew now feels happier to use his car socially, as when he takes his family out for dinner.

He agreed that the upfront payment of a hybrid is higher – about $8,000 to $10,000 more than a similar-sized saloon car. But he said: ‘If you plan to drive the car for a long time, this upfront sum will pay for itself.’

Indeed, hybrid cars are selling well here.

Borneo Motors’ general manager for customer relations, Ms Angeline Tan, said there has been a 50 per cent increase in hybrid sales since fuel prices rose in July last year.

Its hybrids include the Toyota Prius, Lexus RX400 and Lexus LS600, the last of which has sold out.

It sold about 150 of its hybrid models last year. There is a waiting time of up till November for its Prius due to a shortage of production and increase in global demand.

Kah Motor, too, says its Honda hybrid sales have spiked this year. Its marketing manager, Mr Vincent Ng, said there has been a 176 per cent increase in hybrid sales in the first five months of this year over the same period last year.

A total of 283 Honda Civic hybrid models have been registered this year.

Kah Motor will introduce at least two more hybrid models in the next two years.

Another cool option is of course to either walk or cycle to work – a luxury that is only bestowed upon those who work or study very near to their destinations – unless of course the entire journey is air-conditioned (?!) or it’s a breezy journey. I’m not sure how classmates or colleagues will react to a drenched classmate or worker coming in, smelling like he just did a marathon dash. Of course, it doesn’t have to be like this, but for someone (like me) who perspires a lot, a 5 minute walk (to the nearest bus stop or train station) is probably all I can afford without being given a "free bath".

Mr David Tan, 33, gave up his car to cycle to work.

‘I decided to cycle because I wanted to save on fuel and Electronic Road Pricing (ERP) costs,’ he said.

But the car hasn’t been sold. His wife, whose workplace is nearer their home, drives it now – chalking up about $200 a month on fuel.

It would be double that amount if Mr Tan, a regional financial analyst, drove the car instead.

The owner of a Strida foldable bicycle which costs $850, Mr Tan has been cycling to his workplace in Millenia Walk from his home in Upper Boon Keng since December 2006.

He enjoys the 20-minute ride. ‘It is more convenient, and there is a breeze from the river in the morning, so I feel refreshed,’ he said.

Mr Tan does not even need to shower at his office as he does not perspire much.

He admits, though, that bad weather can be a bother for a cyclist.

Also, he chafes at the bad driving habits shown by motorists towards cyclists. ‘Cars cut in front of me without signalling on major roads like Kallang Road,’ he said.

However, the optimist in him feels that the advantages of cycling outweigh the disadvantages.

‘I can save money on fuel and other things like parking charges,’ he said.

Mr Tan saves about $460 a month by taking to his two-wheeler.

‘Driving costs, which include fuel, have gone up since 2006, so I would have to pay even more to drive now,’ he said.

Ms Vivian Yuan, a marketing manager and owner of a foldable bicycle company, agrees with Mr Tan: ‘There has been an increase in inquiries and bike sales because people want to save on petrol, ERP and parking costs.

‘At the same time, they buy bikes for leisure and health purposes as well,’ she added.

The last option (given in the papers, at least) is car-sharing. This is a good option if you do not need a car every day (read: periodically) and if there’s a convenient pick-up or drop-off point for you. It will probably not make sense if you have to travel 30 to 45 minutes to the pick-up/drop-off location unless you really need it – then perhaps distance could be a deterring factor if you really do not need the car. There’s, of course, always the option of public transport – and according to, erm, some minister, taxies are not public transport (line picked up when some minister was asked about deregulating taxi fares).

After getting his driving licence last year, civil servant Jasni Hirman, 47, was looking forward to buying a car to ferry his family of five around.

However, in January this year, he found petrol prices steadily climbing. After re-thinking the car maintenance costs and Electronic Road Pricing fees, he opted for car-sharing instead.

He joined Whizzcar, a car-sharing scheme run by Popular Rent A Car, last month.

Car-sharing schemes allow users to book cars for short periods, usually with access to the vehicles at different locations across the island.

The pioneer of such schemes here was NTUC Income Car Co-op. Piloted in 1997, it had 36 members sharing four cars then. It now has 4,300 members, who share 165 cars in 67 locations.

The scheme took off and soon there were four major players: NTUC Income Car Co-op, Honda Intelligent Community Vehicle System, CitySpeed – which was linked to ComfortDelGro – and Whizzcar.

But now, only NTUC Income and Whizzcar remain.

The general manager for Whizzcar, Mr Ho Kok Kee, said that he had seen a membership increase of 5 to 10 per cent in the past few months, as well as a 15 per cent rise in revenue in the beginning of the year.

Whizzcar’s 85 cars in 33 locations serve over 2,000 members.

About three times a month, Mr Jasni picks up a Toyota Vios from a location in Admiralty, near his Yishun house.

He uses it from about 9am to 7pm, driving his family to weddings, to pick groceries up and for outings at the beach.

He pays between $50 and $60 each time inclusive of petrol, on top of the $10 monthly membership fee and a $60 one-time entrance fee.

‘This is a convenient way for me to be able to drive without expensive rental rates,’ Mr Jasni said.

Lastly, if the last article is anything to go by, I smell of a transport fare hike. =) This, will bring with it another set of social problems that we’d have to tackle in the not-too-distant time. Speaking of public transport, did you know that the MRT services in Taipei is giving their commuters a 75% discount to make use of the EasyCard (our EZLink equivalent) for public transport? =) It’s something we won’t see here, for sure.

Rocketing oil prices have squeezed much of the life out of smaller transport operators, with many now battling to stay afloat.

Much of the pain for these businesses – from car rental set-ups to bus operators and freight firms – boils down to the fact that the huge oil price hikes hit so fast, they had no time to prepare themselves or hedge their costs.

Some firms have seen operating costs rise anywhere from 10 to 30 per cent this year, cutting profit margins.

‘For this period, we are not talking about profit; we are talking about staying afloat,’ said Mr Louis Loh, sales manager of Loh Ghim Chong Transport, a 27-year-old firm with a fleet of 20 air-conditioned buses.

‘Most of our long-term contracts bind us for at least 12 months. Now, we are very cautious about our pricing when renewing contracts,’ he said.

Many companies first began to feel the heat after crude oil shot to US$100 (S$136) a barrel in early January this year, but prices have leapt by more than 30 per cent since then.

The pump price of diesel, which is used mainly by taxis, buses and light goods vehicles, is now about $1.80 a litre.

The diesel bill for one bus has almost doubled in two years, from $1,600 a month in 2006 to $3,000 now, Mr Loh said.

Mr V.S. Kumar, managing director of Network Express Courier Services, has seen fuel costs shoot up by 30 per cent in three months.

But the seemingly obvious solution – passing the costs on to customers – is resisted by many operators as they know that they have to stay competitive in an industry flooded with many players.

‘If we try to raise the cost of our services, our clients will simply run away to another company,’ said Ms Janice Yeong, operations manager of Berlington Services, a freight forwarding firm.

Many prefer to tackle the problem from a different angle – cutting costs. One way is to streamline operations and reduce fuel wastage by proper trip planning.

‘We have informed staff to consolidate deliveries,’ said Mr Kumar. ‘So instead of delivering just two items to one place, I now wait for five items.’

Even some of Singapore’s biggest companies – those with the ability to hedge against rising fuel costs – are not immune to sky-high prices.

Singapore Airlines (SIA), taxi operator ComfortDelGro and shipping company Neptune Orient Lines are some blue-chip businesses that have seen dents in profits and downgrades on their stocks.

Energy costs at ComfortDelGro, which operates Singapore’s biggest taxi fleet, jumped 37.9 per cent in the first quarter compared with last year, sending profits down by 9.4 per cent to $50.2 million.

But commuters need not fear an increase in taxi and train fares just yet, as these are regulated by the Public Transport Council and capped by a fare-adjustment formula.

SIA estimates that it will incur an additional fuel cost of US$39 million for every US$1-a-barrel increase in jet fuel price, excluding any hedging of fuel purchases, said its spokesman.

Even with cost cutting and greater efficiency, the road ahead for transport firms looks bumpy, with analysts tipping that oil prices are likely to stay high given sustained global demand, tight supply and higher production costs.

That could spell high pump prices – and prolonged pain for the transport sector, the ‘most obvious and directly impacted’, said Action Economics economist David Cohen.

‘People will be cutting back on rides in reaction to higher prices. It will be a double whammy for them,’ he added.

Additional reporting by Gabriel Yue and Alvin Lim

Articles obtained from straitstimes.com on 8th June 2008



Reader's Comments

  1. Vandalin | June 9th, 2008 at 9:49 am

    shouldn’t there be reduced taxes or rebates for cars with reduced emissions? and the govt keep saying they’re trying for a clean and green singapore.

    bah humbug

  2. chappy | June 9th, 2008 at 6:01 pm

    Prepare yourselves for a fare hike for the public transport companies. They will want to take this opportunity to earn more bucks and blame it on the rising cost of oil.

    I predict a fare-hike by August 1st.

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