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Saturday, June 27, 2009

Tariff up by 7%

It is reported that electricity tariff in Singapore is to go up by 7% from July 1 to September 30. This is in line with the recent increase in oil prices using the newly revised formula. The below is my personal opinion on the way tariff is determined and imposed.

It is to my observation that it seems to me SP Services is a lot quicker to announce and implement hike in tariff than decrease in tariff. This recent announcement on tariff hike will be imposed in less than a week's time. Last September 2008, the Energy Market Authority (EMA) announced average household electricity tariffs from October to December 2008 is to go up by 21% in the last quarter of 2008 due to higher fuel oil prices. For the same quarter, Hong Kong announced a 3% reduction in tariff and that really puzzled me why can't Singapore be like them. Why can't Singapore share the billions profit made to the commoners? Likewise, this massive hike was announced days before it was to be imposed. Electricity tariff for first quarter of 2009 saw a rare reduction of 24.7% due to falling oil prices and possibly pressure from the public. Announcement on the reduction was made almost a month before Q1 2009.

Do note that all previous adjustments were based on a different formula.

Just when the oil prices are stabilising and bottoming, formula for electricity tariff is revisited and revised to "better" follow oil prices. In my opinion, the new formula will benefit more on the power supplier and generation companies and not the public. Rebates given out are definitely not sufficient when all prices like food and necessities go up but rarely come down.

If public outcry by the netizens are ignored, I think the next general election would be a lot interesting.

Tariff up by 7% [via]
My previous post on tariff [via]

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