RUNNING the air-conditioner to beat the heat over the next three months will cost $1.50 to $15.20 more a month.

Electricity prices here will go up by about 7 per cent from Wednesday, on the back of increasing fuel oil prices, said utilities services provider SP Services on Friday.

From next month, three-room households will pay about $4 more a month in power bills, and five-room households, about $6 more.

This is the first increase in electricity tariffs, which are revised every quarter, since the last quarter of last year.

From Wednesday, electricity will cost households about 19 cents per kWh, without the goods and services tax, up from the current 18 cents.

SP Services said the average fuel oil price over the last three months went up from $60.47 per barrel to $76.24 per barrel.

After going up 21 per cent in the last quarter of last year, electricity tariffs fell 25 per cent in the first three months of this year.

To reduce the likes of such wide quarterly swings in electricity prices, the Energy Market Authority (EMA) here, which regulates the electricity and gas industry, will now use a new formula to calculate tariffs.

This will take into account a wider spread of fuel oil prices from which an average is calculated - three months now, as opposed to the previous one month.

It also allows tariffs to reflect oil price movements more closely, instead of a three-month time lag under the old formula.

Read the full report in Saturday's edition of The Straits Times.