SINGAPORE, 30 June – About half the households in Singapore will pay higher electricity bills for the next three months, with the electricity tariff for the next quarter going up by about 8 per cent compared to the previous quarter.
The electricity tariff for the period July 1 to Sept 30 will be 30.17 cents per kilowatt-hour (kWh), excluding the goods and services tax (GST), said grid operator SP Group on Thursday (June 30).
This is up from the current rate of 27.94 cents per kWh. The electricity tariff has been rising since April last year.
Meanwhile, producer and retailer of piped town gas City Energy also announced on Thursday that the gas tariff for households will go up from 21.66 cents per kWh before GST, to 23.09 cents per kWh. The 1.43 cents increase is equivalent to a price hike of 6.6 per cent, and will be in effect from July 1 to Sept 30.
Both SP Group and City Energy attributed the price increments to higher fuel costs.
SP Group said the higher energy costs were driven by rising global gas and oil prices exacerbated by the conflict in Ukraine.
The grid operator noted that households living in a four-room Housing Board flat – which typically consumes about 349kWh of electricity a month – can expect their average monthly electricity bill to go up by $8.25 excluding GST.
Electricity prices have increased worldwide as gas prices hit record levels due to a myriad of factors, including the unanticipated demand for gas from pandemic-recovery, severe weather events and reductions in the global gas supply.
While the global energy crisis was expected to ease as winter demand cooled off, market fundamentals have been severely exacerbated by the rippling effects of Russia’s invasion of Ukraine.
The war has resulted in wide ranging sanctions against Russia’s energy exports, which include crude oil, diesel and piped gas, forcing countries in Europe to scour the world for alternatives, putting them in direct and fierce competition with the rest of the world including Singapore.
The Republic depends on imported gas for about 95 per cent of its electricity needs.
The electricity tariff in Singapore is calculated from four components.
Fuel costs, which reflect the cost of imported natural gas and tracks the price of oil, make up about half of the tariff.
Benchmark Brent crude oil prices were trading close to $116 a barrel on Thursday, while around the same time last year markets were dealing around $75 to $76 a barrel, representing a rise around 52 percent over a period of 12 months, according to data from traders and brokers.
The rest of the tariff covers other costs related to activities such as maintenance of power plants, metre-reading and transporting electricity through the grid.
Rystad Energy, an independent energy research and business intelligence company, said the outlook for Asia and Singapore will be tough especially as European nations compete for alternative supplies.
“Unfortunately this means Asia will need to cede LNG (liquified natural gas) to Europe during this time and the focus in the region will turn towards more burning of coal and or fuel oil wherever possible,” it said.
“Singapore’s dependence on gas also means it is more exposed to this market than most other Asian countries, though economically we are still in a position to compete for marginal supplies. — The Straits Times