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More COE quota to be brought forward from peak years in 'cut-and-fill' approach: MOT
The COE new supply will be used to fill current troughs while maintaining the government's zero-vehicle growth policy.
SINGAPORE — More Certificate of Entitlement (COE) quotas will be brought forward from peak years to fill current supply troughs, said acting minister for transport Chee Hong Tat on Monday (6 November).
Chee, who was responding to questions on high COE prices in parliament, said that a better outcome can be achieved for all stakeholders if the peak-to-trough ratio can be reduced using a "cut-and-fill" approach to shave off future peaks and use this supply to fill current supply troughs while maintaining the government's zero-vehicle growth policy.
Chee acknowledged that despite previously making several moves to reduce volatility in COE quota supply – such as bringing forward quota from guaranteed de-registrations in the peak years and using the moving average of de-registrations in the four preceding quarters to compute COE quotas for the next quarter instead of just the preceding quarter – demand has remained "very strong", resulting in the continued rise of COE prices.
Also read: Latest Singapore COE prices and bidding results (18 October)
Also read: COE supply to increase for Categories A, B and C during Nov 2023 to Jan 2024 period
Also read: COE quota to increase for November 2023 to January 2024 period
"For Categories A, B and C, we are currently facing a tight supply situation because many of the existing vehicles have not reached the end of their COE period and are not due for deregistration.
"Looking ahead, industry players have correctly observed that the COE supply for these categories will increase significantly from the second half of 2024 before reaching the peak supply years from 2026 to 2027," said Chee.
Changes in COE quota
Last week, the Land Transport Authority (LTA) announced that the supply for Categories A and B quota for the November 2023 to January 2024 bidding period will both see an increase of 35 per cent from the previous quarter.
"With the increase in supply, we hope that COE prices would moderate. However, we know prices will also depend on market demand, and demand is not within the Government’s control," said Chee.
"I need to be upfront with everyone that it is not possible to predict how prices will move in the next few rounds of COE bidding, but I want to assure Honourable Members and the public that MOT and LTA are doing what we can to address the concerns," he added.
In the last COE bidding exercise on 18 October, Category A prices closed at a record S$106,000, while Category B breached the S$150,000 mark to reach another new record.
Similarly, prices for Category E reached a record S$158,004 while Category C hovered near the S$85,000 mark. Motorcycle premiums closed at S$11,201.
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