Finance Minister Tharman Shanmugaratnam hinted at it yesterday during a dialogue with residents of Toa Payoh East.

He said: 'We know the large increase this quarter has unsettled many people. We will take that into consideration in next year's Budget when we decide on the U-Save (Utilities-Save) rebates and the total package solution for the economy.'

Electricity tariffs shot up 21 per cent last Wednesday - the biggest one-time increase in seven years.

Grassroots leader Rashid Hussein, 67, questioned the timing of the hike, given that oil prices had just gone down.

Mr Tharman acknowledged that it was 'sudden and surprising for most people'. But he placed it in context, saying that in the course of this year, the price of electricity had risen 'much less' than oil prices.

'If you take the year as a whole, you take the electricity tariffs this year compared to last year's, the increase is going to be 26 per cent,' he said.

In contrast, oil prices from January to September had gone up by 45 per cent, he noted. 'So the electricity increase has been reasonable, compared to the oil price increase.'

He reiterated the Government's stance on not subsidising oil prices, noting that the practice had proved problematic for countries in the region and for developed countries.

'When they try to subsidise, it either leads to shortage because the suppliers don't want to supply, or it leads to the government having a bigger and bigger bill on its budget and eventually taxpayers have to pay,' he said.

Instead, Singapore's approach is to set a realistic price based on the global market price, but help the poor through measures such as the U-Save rebates.

For instance, families in one or two-room HDB flats would have received rebates amounting to four to five months of their utilities bills, he said. 'People say the Government gives with one hand and takes with another,' he said to smiles. 'But the hand giving is much much bigger than the hand taking back.'

Mr Tharman also held out hope that electricity tariffs would go down, on the heels of lower oil prices. 'Many people have forgotten that last year, for six months, the tariffs went down, so it is not always going up.'

LI XUEYING