SINGAPORE - Electricity and gas tariffs will rise in the next three months but they will still be among the lowest in years.
About half of Singapore’s 1.4 million households can expect electricity tariffs to rise by an average of about 9 per cent from today to Dec 31, compared with the three months before, SP Group said on Wednesday (Sept 30).
But prices are still the second-lowest they have been in the last three years.
City Gas said gas tariffs will rise in the fourth quarter by about 5 per cent for households. They are at their third-lowest levels in three years.
Industry regulator Energy Market Authority (EMA) said that the electricity tariff changes apply to only 53 per cent of households which buy electricity from SP Group at the regulated tariff.
They do not apply to the remaining 47 per cent of households which, as at end June, have switched to a retailer in the open electricity market.
In the last quarter of the year, households powered by SP Group will have electricity tariffs rise from 19.6 cents to 21.43 cents per kilowatt hour (kwh), before the 7 per cent goods and services tax (GST).
This means that the average monthly electricity bill for families living in four-room Housing Board flats will increase by $7.01.
Gas tariffs for households are up by 0.83 cent per kwh, from 16.36 cents last quarter to 17.19 cents this quarter per kwh, before GST.
SP Group and City Gas review electricity and gas tariffs quarterly based on guidelines set by EMA.
SP Group said the increase in electricity prices from this month to December is due to higher energy costs, which determine close to 73 per cent of the tariffs in the quarter, and are paid to power generation companies.
Other components of the electricity tariff, such as network costs and market support services, remain unchanged.
City Gas said that gas tariffs have also gone up due to fuel cost hikes.
But earlier in the third quarter, electricity tariffs fell by 15 per cent and gas tariffs fell by 4 per cent, following a dip in the second quarter as well.
Professor Subodh Mhaisalkar, executive director of the Nanyang Technological University’s Energy Research Institute said the Covid-19 pandemic led to a global decline in fuel prices – oil in this case – in March.
“Economic activity is not what it was and oil prices are forecast to be low until demand increases to match supply,” he said.
However, with the easing of Covid-19 safety curbs, Prof Mhaisalkar added that most analysts are predicting a modest increase in fuel prices, and thus an associated increase in electricity prices is expected.
But if electricity retailers rely on green sources of energy such as solar, he said, they may be able to keep tariffs unchanged even if fuel prices rise.
One open market electricity retailer that is dropping prices slightly, instead of raising them, is iSwitch.
Mr Andrew Koscharsky, iSwitch’s chief commercial officer, said that the company will be lowering the rate of its fixed price contract by 0.6 per cent from 15.79 to 15.69 cents per kwh (before GST).
The retailer, which has more than 100,000 customers, said that this price will apply to its six-month contract for customers.
On how iSwitch is able to lower prices despite fuel cost increases, Mr Koscharsky said that the company is able to pass on cost savings to its customers because it is not bound by the same “expensive overheads that may be tied to a traditional utility”.
