LTA To Revise COE Quota Calculation Method With The Aim Of Reducing Volatility

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Editors%2 Fimages%2 F1658713413946 Coe FeaturedThe LTA will adjust the method in which the quantity of COE Quotas are determined from August 2022 onwards. This should help to reduce the quarter-on-quarter volatility of the COE supply.

Currently, this figure is set based on the number of vehicles deregistered in the previous quarter, with one month lag time for processing and computation. This will change with effect from 1 August 2022 onwards - the number of COEs available for bidding in each quarter will be based on a rolling average of deregistrations over the last two quarters.Editors%2 Fimages%2 F1658713695968 1658713695968The start of each new COE quota bidding period will continue to be one month after the close of each calendar quarter.

What Does All This Mean In Tangible Numbers?

Under the adjusted method, the COE quota for August 2022 to October 2022 will be 10,581, or an average of 3,526 COEs monthly for all categories combined, and bidding under this quota will start on 1 August 2022.Editors%2 Fimages%2 F1658713698276 1658713698276Only time will tell if COE quota premiums will fall with the new regulations, though the cyclic nature of the COE system probably suggests that prices will remain elevated for the foreseeable future.

The next quota announcement for the bidding period of November 2022 to January 2023 will be made in October 2022.

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