SINGAPORE: The growing tension in the Middle East is driving up oil prices, putting so much pressure on local private bus operators. As reported by Shin Min Daily News, small- and medium-sized operators may not be able to survive for more than six months if the situation continues to worsen and existing contracts can’t be adjusted anymore.
There is a continuous rise in local retail prices for gasoline and diesel, resulting in diesel being more expensive than gasoline in some cases. A 67-year-old owner of 24 buses shared that since the diesel prices have surged from their usual price, all of his profits have been wiped out. Furthermore, he declared that this was the worst oil price increase that he had experienced in his 45 years in the industry.
He explained that the oil prices will not return to normal and will continue to rise within one or two months. More so, the contracts signed between private bus operators and companies and schools cannot be adjusted. Given this, he believes that small operators can only survive the crisis for three months at most, and medium-sized companies like his can only survive for another six months.
The head of the Singapore School Bus Owners Association also stated that his past experience with soaring oil prices made him realise that contracts need to include clauses for protection, which include renegotiations when oil prices exceed a certain range.
However, he said that many small companies may not have such clauses in their contracts, and if they cannot adjust prices, they will be at a great disadvantage and will have to keep paying the price difference. The association currently has about 1,000 members, of which 95% are small companies with fewer than 13 employees.
“Since last week, we have been discussing new prices with the companies we have signed contracts with….If oil prices continue to rise, I believe many small companies can only survive for two or three months,” they admitted.
Other related news
In similar news relating to the Middle East turmoil, the Singapore government recently operated repatriation flights from Muscat, Oman, as a way to evacuate citizens affected by the escalating Middle East conflict.
The Minister of State for Foreign Affairs stated that about a quarter of Singaporeans who have re-registered with the Ministry of Foreign Affairs (MFA) have asked for help to return home since the conflict started. Flights from Muscat catered to Singaporeans who were currently in Oman and the United Arab Emirates (UAE), both countries having about 60% of e-registered Singaporeans.
Read more about the news story here.
