--- title: "Fuel prices soar, business under pressure, ComfortDelGro: Hedging strategies alleviate cost increases | Lianhe Zaobao" type: "News" locale: "en" url: "https://longbridge.com/en/news/283096782.md" description: "The Middle East conflict has led to a surge in fuel prices, putting pressure on ComfortDelGro's public transportation business. The company's contracts with the transportation department include a fuel indexing mechanism, which helps mitigate the impact of fuel price fluctuations. In response to rising fuel costs, the taxi and private hire car businesses have temporarily increased fares. The group stated that it will closely monitor the impact of rising fuel prices and adjust its hedging strategy accordingly. Despite facing intensified market competition, the EBITDA of the taxi and cab businesses has declined" datetime: "2026-04-17T06:02:19.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283096782.md) - [en](https://longbridge.com/en/news/283096782.md) - [zh-HK](https://longbridge.com/zh-HK/news/283096782.md) --- # Fuel prices soar, business under pressure, ComfortDelGro: Hedging strategies alleviate cost increases | Lianhe Zaobao The Middle East conflict has led to a surge in energy and fuel costs, putting pressure on the public transportation business under ComfortDelGro. However, the contracts signed with the transportation department include a fuel indexing mechanism, which helps mitigate the impact of oil price fluctuations. As for the taxi and private hire car business, the group has temporarily raised fares to allow drivers to cope with daily fuel expenses using the related income. The group stated that it will continue to closely monitor the impact of rising fuel prices and adjust its hedging strategy accordingly. ComfortDelGro responded in writing on Friday (April 17) to shareholder questions submitted for the shareholders' meeting, explaining the impact of the Iran war on the group's business. In terms of public transportation, the contracts signed with the transportation department include a fuel indexing mechanism that can alleviate the impact of oil price fluctuations. Although there may be short-term discrepancies between fuel price increases and the index adjustments stipulated in the contracts, the group is addressing recent volatility risks through hedging strategies. The ongoing war has also caused significant disruptions to flights, leading to a decline in demand for ComfortDelGro's taxis and private hire cars in the UK. "The group will closely monitor the situation of the Iran war's impact on fuel prices, foreign exchange, and exchange rates, and we will be well-prepared to take appropriate measures." ### Poor Performance of Singapore Taxi and Hire Car Business On the other hand, excluding the contribution from London private hire car company Addison Lee, the EBITDA of the taxi and hire car business declined last year. The group pointed out that the aforementioned business faces challenges from intensified competition in the Singapore market and a decrease in the overall size of the taxi fleet. According to statistics from the Land Transport Authority, the total number of local taxis decreased from 13,117 at the end of December 2024 to 12,161 in the same period last year. As of December 31 last year, ComfortDelGro's taxi fleet size also reduced to 7,602 vehicles. In response to shareholders' inquiries about whether profits from the Singapore taxi business will continue to decline and the strategies to cope, ComfortDelGro stated that its business-to-business (B2B) operations are expected to remain stable, while its business-to-consumer (B2C) operations are expected to face pressure amid fierce competition from other platforms. In the future, Singapore's taxi and hire car services will focus on business-to-business services, and the group plans to increase the number of high-end six-seater and luxury vehicles. It will also evaluate adjustments to commission and fee structures to optimize the balance between driver supply and passenger demand #### Extended Reading To help drivers cope with rising fuel prices, ComfortDelGro imposes temporary surcharges to increase fares ComfortDelGro signs nine collective agreements and two memorandums of understanding with the National Transport Workers' Union In addition, the group will continue to invest in autonomous driving technology, expand the scale of existing businesses, and promote commercialization, aiming to assist drivers and meet the currently under-served market demand. ### Fare Increase May Boost Revenue, But License Fees Offset Gains The Public Transport Council (PTC) approved a fare increase for public transport last year. Will this boost ComfortDelGro's revenue and pre-tax profits? The group responded that the PTC conducts an annual fare review based on a set formula to compensate operators for increased costs due to inflation. "While the fare increase will boost subway revenue, under the new subway financing framework, the license fees paid by operators to the Land Transport Authority may be adjusted. If profits exceed expectations, operators will have to pay higher license fees." In the fiscal year 2026, the group expects employee salaries and some costs to face inflationary pressures. ### No Plans for Local and Overseas Subsidiaries to Go Public Shareholders also inquired whether the group is considering an initial public offering (IPO) for its Australian subsidiary to unlock value. ComfortDelGro's answer is that there are currently no plans for local or overseas subsidiaries to go public, but it will continue to explore suitable merger and acquisition opportunities and may consider increasing debt financing to support related acquisitions. 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