Budget 2021: Petrol duties raised with immediate effect, road tax rebates to help offset increased costs

SINGAPORE – Motorists will have to pay more at the pump from Tuesday (Feb 16), with petrol duties raised for the first time in six years.

Announcing the hike with immediate effect during his Budget speech on Tuesday, Deputy Prime Minister Heng Swee Keat said that motorists will also be given road tax and additional petrol duty rebates to help offset the higher costs.

Petrol duties were last raised in 2015 to encourage less car usage and reduce carbon emissions.

The duty for premium grade (98-octane and above) petrol will be raised 15 cents per litre to 79 cents a litre, while that for intermediate grade (92-octane and 95-octane) petrol will be raised 10 cents a litre to 66 cents a litre.

The higher petrol duties are intended to encourage Singaporeans to reduce their vehicle usage as part of the Republic’s larger push towards a more sustainable future, alongside efforts such as increasing support for electric vehicle-related initiatives.

Motorcyclists will be given a 60 per cent road tax rebate for a year, and up to $80 of additional petrol duty rebate, depending on the engine capacity.

Taxi and private-hire drivers will be given a 15 per cent road tax rebate for a year, and $360 of additional petrol duty rebate over four months.

Goods vehicles and buses will be given a 100 per cent tax rebate for a year, while cars using petrol will be given a one-year tax rebate of 15 per cent.

All road tax changes will be applicable for a one-year period from Aug 1, 2021 to July 31, 2022.

Around $113 million has been set aside to provide rebates for petrol and petrol-hybrid vehicles to ease the transition towards higher petrol duties.

The measures will help offset one year of petrol duty increases of taxis and motorcycles, and about two-thirds of petrol duty increases for commercial vehicles and cars. Most of the expected revenue increase from the petrol duties will be given out through the offsets.

In 2015, the petrol duty was raised by 20 cents per litre for premium grade petrol, and 15 per cents per litre for intermediate grade petrol.

Then, a one-year road tax rebate of 20 per cent for cars, 60 per cent for motorcycles and 100 per cent for the small number of commercial vehicles using petrol, was rolled out.

Read more on Budget 2021 from ST’s live coverage here.

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