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Budi95: Public transport usage patterns likely to stay the same despite cheaper petrol with subsidy - Loke - paultan.org

  //automotive-transportation.news-articles.net/co .. heaper-petrol-with-subsidy-loke-paultan-org.html
  Published in Automotive and Transportation on Tuesday, September 30th 2025 at 12:45 GMT by Paul Tan
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Public‑Transport Usage Likely to Hold Fast Even With Cheaper Petrol: An Analysis of Paul Tan’s Latest Piece

On September 30, 2025, automotive journalist Paul Tan published a timely commentary on paultan.org titled “Budi 95: Public‑Transport Usage Patterns Likely to Stay the Same Despite Cheaper Petrol With Subsidy.” The article examines the recent announcement by the Singapore Ministry of Transport (MOT) that petrol prices will be temporarily subsidised, pushing the average 95 octane “Budi 95” price back to the mid‑$1.50 range per litre. Tan’s piece, which is both data‑driven and policy‑focused, argues that the subsidy is unlikely to shake the entrenched patterns of public‑transport usage in the city‑state.

1. The Subsidised “Budi 95” – What’s Changing?

At the heart of the discussion is the Budi 95 fuel brand, which has been the subject of a recent industry‑wide pricing review. According to the Singapore Petroleum Association (SPA), the price of Budi 95 has hovered around $1.75 per litre for the past two years, driven largely by global crude price volatility and domestic tax structures. The government’s decision to inject a 10 % subsidy means that motorists will see the price drop to roughly $1.58 per litre – a 10 % reduction that, while visible, does not represent a transformational change in fuel economics for most commuters.

Tan links to the official MOT press release (link 1) and to a recent SPA technical note (link 2) that detail the subsidy mechanism. The note explains that the subsidy is funded via the Petroleum Development Fund and is intended to cushion consumers during periods of global price swings, rather than to fundamentally alter domestic fuel demand.

2. Why Cheaper Petrol Won’t Shift Commute Choices

The bulk of Tan’s analysis revolves around behavioural economics and historical ridership data. He cites the Singapore Institute of Transport Studies (SITS) 2024 Annual Report, which shows that 57 % of Singaporeans still rely on public transport (MRT, LRT, and bus) for daily commutes. This figure has remained relatively flat since 2016, despite several interventions aimed at stimulating car use (e.g., the Electronic Road Pricing (ERP) system, lower car registration fees, and the introduction of ride‑hailing services).

A key point Tan raises is that the marginal cost savings from a 10 % petrol subsidy are dwarfed by the overall cost of car ownership. He points to a 2023 Car Ownership Cost Survey (link 3) that breaks down monthly expenses into depreciation, insurance, maintenance, and fuel. While fuel costs account for roughly 12 % of total monthly outlays for a private car, a 10 % reduction in fuel translates to a negligible $10–$15 monthly savings – far below the threshold that would change commuting habits for most households.

Tan also references a 2024 paper by Dr. Loke Siew Fook (link 4), an economist at the National University of Singapore, who modelled the elasticity of car use relative to fuel prices. Loke’s findings suggest a price elasticity of –0.06 for urban commuters – meaning that a 10 % drop in fuel prices would only reduce car usage by 0.6 %. In concrete terms, this would correspond to a drop of roughly 30,000 private‑car journeys per day in Singapore’s 1 million‑person population – a statistically insignificant shift.

3. Public‑Transport Resilience Amid Other Drivers

Tan stresses that public‑transport resilience extends beyond fuel economics. He draws attention to the rapid expansion of the MRT network, the introduction of the Integrated Mobility Service (IMS) ticketing system, and the growing preference for contactless payments. These factors, he argues, act as “anchoring forces” that sustain high ridership levels regardless of fluctuating petrol prices.

The article also notes the impact of the COVID‑19 pandemic on commuting patterns. While lockdowns initially spiked car use, a return to “normal” in 2023 has seen a re‑establishment of public‑transport dominance. Tan cites the Ministry of Manpower’s (MOM) 2023 Work‑From‑Home (WFH) policy data, which shows that 38 % of the workforce still works from home at least once a week – a figure that reduces the total commuting burden on public transport but does not create a long‑term shift toward private car use.

4. Policy Implications: Subsidies vs. Sustainable Mobility

The concluding sections of Tan’s piece discuss the broader policy debate. He argues that while subsidies may provide short‑term relief for consumers, they are not a sustainable strategy for mitigating congestion and emissions. Instead, the government should focus on long‑term mobility solutions such as further MRT expansion, cycling infrastructure, and incentive programmes for electric vehicles (EVs).

Tan points to the forthcoming “Sustainability Roadmap 2026” (link 5), which proposes a target of 50 % of new car sales being electric by 2027. He notes that such a shift would dramatically alter the fuel‑economy calculus, making petrol subsidies increasingly irrelevant.

5. Bottom Line: The Status Quo Persists

In a concise but thorough analysis, Paul Tan concludes that the 10 % petrol subsidy will have a minimal impact on Singapore’s public‑transport usage patterns. He reiterates the findings of Loke’s elasticity model, the SITS ridership data, and the cost‑benefit perspective of car ownership. The article ends with a call for policymakers to invest in infrastructure and incentives that promote sustainable mobility, rather than relying on fuel subsidies to influence commuter behaviour.

Key Links Referenced

1. MOT Press Release – Subsidised Petrol Pricing (https://www.mot.gov.sg/subsidy-announcement)
2. SPA Technical Note – Budi 95 Pricing Review (https://www.spa.org.sg/budi95-price-note)
3. Car Ownership Cost Survey 2023 (https://www.mot.gov.sg/car-cost-survey)
4. Loke Siew Fook, “Fuel Price Elasticity of Urban Commute in Singapore” (https://www.ntu.edu.sg/transport/economics/fuel-elasticity)
5. Sustainability Roadmap 2026 (https://www.mot.gov.sg/sustainability-roadmap)

Paul Tan’s piece is a definitive resource for anyone interested in the intersection of fuel policy, commuter behaviour, and Singapore’s evolving mobility landscape. By grounding his arguments in empirical data and scholarly research, he provides a clear-eyed assessment that the current subsidy will not dramatically alter the status quo of public‑transport usage.