From October to December, Singaporeans should brace themselves for a surge in electricity and gas tariffs. The national grid operator, SP Group, has announced an average increase of 3.7 percent in electricity tariffs during this period. This uptick translates to an approximate rise of 0.98 cents per kWh before the imposition of the Goods and Services Tax (GST). This marks the second consecutive quarter of tariff hikes, primarily attributed to the escalating energy costs from the previous quarter.
Impact on Households
For the average Singaporean household, especially those residing in Housing Board four-room flats, this means an increase of S$3.57 (US$2.60) in their monthly electricity bills before GST. Additionally, City Energy has announced a 2.3 percent increase in the gas tariff, which will further strain household budgets.
Government’s Supportive Measures
Recognizing the financial strain these increases might cause, Deputy Prime Minister Lawrence Wong has unveiled a new S$1.1 billion (US$800 million) support package. This initiative includes cash payouts and utility bill rebates for eligible Singaporeans.
The Finance Ministry highlighted that approximately 950,000 Singaporean households living in HDB flats will benefit from U-Save and service and conservancy charges (S&CC) rebates in October. These rebates, disbursed quarterly, are integral components of the permanent GST Voucher scheme and the Assurance Package, both designed to assist lower- to middle-income households.
Furthermore, from January 2024 to December 2025, eligible households will receive an additional S$20 per quarter of U-Save rebates, which will be disbursed alongside the regular U-Save.
Understanding the Tariff Structure
P Group, responsible for Singapore’s electricity network, reviews the electricity tariffs every quarter, adhering to guidelines set by the industry regulator, the Energy Market Authority (EMA).
The electricity tariff comprises four components:
- Energy Costs: Payments made to generation companies.
- Network Costs: Payments to SP Group to cover the cost of electricity transportation through the power grid.
- Market Support Fee: Payments to SP Group for services like billing and meter reading.
- Wholesale Market and Power System Operation Fee: Payments to the energy market company and power system operator.
The energy costs component undergoes quarterly adjustments to mirror the fluctuations in fuel and power generation costs. The fuel cost, in particular, is tied to oil prices through commercial contracts.
In Conclusion
While the rising energy costs present challenges, the government’s proactive measures aim to mitigate the financial impact on households. As Singapore navigates these changes, the support packages and rebates will play a crucial role in ensuring that residents can manage their expenses effectively.
Also learn about The Future of Renewable Energy in Singapore: Meeting the Country’s Energy Needs Sustainably.
