Diesel oil and kerosene, which were previously taxed at 15 percent, will now be subject to a reduced tax rate of 10 percent.

MoF adopted this solution to share business losses that have resulted from increased world petrol and oil prices.

Prices reached US$90 per barrel of petrol and US$93 per barrel of diesel oil on the Singapore market on April 19.

The reduction also follows the Government’s decision to extend the period of time when retail petrol prices will rise to the end of June.

MoF added that with the rising import prices, petrol firms have lost US$0.06 per litre of petrol.

Petrol dealers received approximately US$26.3 million from the petrol price stabilisation fund in compensation for their losses since the beginning of this month.

However, the money is not enough to help them coup losses, according to MoF.

The ministry said it is unable to raise retail prices at this time because it could result in a domino effect, with prices for other necessities also going up. It added that it would apply other administrative measures if the world petrol price continues to rise and domestic firms suffer bigger losses.