The Oil Fuel Fund Executive Committee voted on Friday to freeze retail prices for all types of fuel to cushion the impact on the cost of living of soaring global oil prices triggered by the febrile Middle East situation.
The resolution comes as global energy benchmarks hit record multi-month highs, driving sharp spikes in Asian markets. Refined product prices in Singapore jumped dramatically on Friday, with diesel surging to $191.91 per barrel and gasoline rising to approximately $148 per barrel.
The committee is currently deliberating additional long-term relief measures to cushion domestic retail prices if market volatility persists.
The sharp jump in global oil price volatility stems primarily from continuing conflicts in the Middle East, particularly recent attacks on oil tankers passing through strategic maritime choke points, including the Strait of Hormuz and the Red Sea.
The security threats are jeopardising supply chain safety, causing shipping freight rates and marine insurance premiums to skyrocket overnight.
Market analysts noted that the geopolitical shock is exacerbated by existing supply tightness due to ongoing production cuts by major oil exporters, as well as short-covering by investors in futures markets, which accelerated the upward momentum.
The committee urged all sectors to conserve energy in the effort to reduce personal household expenses and curb the country's reliance on fuel imports.
The committee also assured the public that the Oil Fuel Fund will use all available mechanisms to maintain domestic price stability at a reasonable level.
