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    Singapore electricity tariff up by 8.1% for third quarter


    July 1, 2022 - Luke Pachymuthu

     

      The cost of electricity has been pushed up again by rising global gas and oil prices amid the war in Ukraine. For the next three months, the electricity tariff here will be 30.17 cents per kilowatt-hour (kWh), excluding the goods and services tax - an 8.1 per cent hike from the last quarter.

      The tariff has been on the rise since the first quarter of last year, when it was 22.21 cents per kWh.

      Grid operator SP Group said the average monthly electricity bill for families living in an HDB four-room flat is expected to increase by $8.25 excluding GST to around $111.60. For three-room flats, the tariff jump is expected to add an extra $6 to the bill, and for five-roomers, $9.60.

      Households on fixed price plans will be cushioned against the price rise, until "such time when they renew their contracts, where they are likely to see higher prices", said energy regulator Energy Market Authority (EMA).

      This applies to around 50 per cent of households here, it added.

      The price of gas for households is also going up from 21.66 cents per kWh before GST to 23.09 cents per kWh. The 1.43-cent increase is equivalent to a price hike of 6.6 per cent, and like the rise in electricity prices, will be in effect until the end of September.

      SP Group and gas producer City Energy blamed the price increments on higher fuel costs, which SP Group said was driven by rising global gas and oil prices exacerbated by the conflict in Ukraine.

      Electricity prices have increased worldwide as gas prices hit record levels due to a host of factors, including the unanticipated demand for gas from pandemic recovery, severe weather events last winter and reductions in the global gas supply.

      While demand was expected to ease as winter passed, market fundamentals have been severely exacerbated by the rippling effects of Russia's invasion of Ukraine.

      The war, which is entering its fifth month, has resulted in wide-ranging sanctions against Russia's energy exports, which include crude oil, diesel and piped gas. This has forced countries in Europe to scour the world for alternatives, putting them in direct competition with the rest of the world, including Singapore.

      The Republic depends on imported gas for about 95 per cent of its electricity needs and is vulnerable to any shifts in supply-demand fundamentals globally.

      The electricity tariff in Singapore is calculated from four components. Fuel costs, which reflect the cost of imported natural gas and track the price of oil, make up about half of the tariff.

      The rest of the tariff covers other costs related to activities such as maintenance of power plants, meter-reading and transporting electricity through the grid.

      Rystad Energy, an independent energy research and business intelligence firm, said: "Singapore's dependence on gas also means it is more exposed to this market than most other Asian countries, though economically it is still in a position to compete for marginal supplies."

      In a media briefing in Singapore on Wednesday, energy giant Shell's chief executive Ben van Beurden said liquefied natural gas will continue to remain expensive, and spot buyers would face stiff competition.

      Last week, the Government announced that it would provide a $100 utilities credit to every Singaporean household as part of a $1.5 billion support package to help lower-income families and vulnerable groups amid rising global inflation.

      The EMA had also previously noted that the Household Support Package introduced as part of Budget 2022 will give eligible households double the quantum of their quarterly U-Save vouchers this year, which will help defray the costs of higher electricity bills.

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