Drawing on Fuel Equalisation Fund to Buffer PTOs Against Rising Energy Costs

Written Reply to Parliamentary Question

Mr Alex Yeo asked the Acting Minister for Transport

a.      whether there are plans to draw on the Fuel Equalisation Fund to buffer public transport operators (PTOs) against the current rising energy costs; and

b.      whether the Government will consider additional support measures to mitigate any public transport fare increases as a result of the same trend.

Reply by Acting Minister for Transport Jeffrey Siow:

1.      With the introduction of an Energy Index into the fare adjustment formula, the rail operators no longer need the Fuel Equalisation Fund to help them mitigate the impact of energy cost fluctuations. The Energy Index tracks the year-on-year changes in diesel and electricity prices and will account for the rising energy cost that rail operators face when public transport fares are reviewed during the annual Fare Review Exercise. For bus operators, the service fees that they receive are indexed to energy prices.

2.      In considering the fare adjustment, the Public Transport Council (PTC) will balance fare affordability concerns with financial sustainability of the public transport operators, and exercise discretion to defer part of the maximum allowable fare adjustment to ensure that any fare adjustment is manageable. During the 2025 Fare Review Exercise, the Government provided over $200 million in subsidy to cover the cost of the PTC deferring part of the maximum allowable fare increase. The Government also provides more than $2 billion in subsidies annually to keep bus and train services running.