In September, the SP Group announced that the electricity tariff for all households will increase by 9.3 per cent, or an average of 1.83 cents per kWh, before Goods and Services Tax (GST), for the period of October 1, 2020, to December 31, 2020.
On October 14, Member of Parliament Liang Eng Hwa asked in the House about the basis of the rise in tariffs, and whether the consumption of electricity and gas had increased with more people working from home.
In response, Second Minister for Trade and Industry Tan See Leng replied that both electricity tariffs and gas prices rise and fall in tandem in with global fuel prices.
As such, electricity tariffs have averaged at 24.58 cents per kWh while gas prices have averaged at 18.36 cents per kWh since January 2018.
Electricity tariffs are still lower than average despite the rise
Tan further highlighted that fuel prices had dropped to their lowest levels in 20 years in April 2020.
This was then followed by a rise of 46.6 per cent in the third quarter of 2020, in tandem with the resumption of global economic activity.
Tan then explained that while electricity tariffs rose to 22.93 cents per kWh and gas to 17.19 cents per kWh for the fourth quarter of the year, as fuel prices rebounded, this was still lower than the first quarter of 2020, and are among the lowest since January 2018.
He said:
"So for electricity tariffs in particular, it is worth pointing out that the fourth quarter 2020 tariffs still remain at 11.6 per cent lower than Q1 of 2020 and 6.7 per cent lower than the average electricity tariff between January 2018 till September 2020."
In addition, 47 per cent of all households will not be affected by the new tariff prices as they have already switched to the open electricity market, he added.
Tariffs are benchmarked against the prevalent crude oil price
Giving more context, Tan stated that the tariffs were benchmarked against the prevalent crude oil price.
This is due to 95 per cent of the electricity grid in Singapore coming from the power generation sector, which has to buy liquefied natural gas and piped natural gas from overseas.
Meanwhile, alternative energy sources constitute a very small proportion as a result of geographical limitations, although the government is collaborating with "industry parters and industry players" to expand Singapore's solar power capacity.
Tan laid out the plans for solar power to be as such:
"We aim to increase our solar capacity by fivefold. Today we are at 0.4 gigawatt peak. We are trying to achieve, at least two gigawatt peak by 2030 in about 10 years time.
And we hope that that will contribute to around 3 per cent of our energy consumption in 2030. Consumers who are interested to procure solar power can do so by engaging our local solar companies."
Average electricity and gas consumption went up from April to July 2020
Tan also pointed out that the average monthly household consumption of gas and electricity had increased from April to July 2020, compared to the same period last year.
The minister noted that the 16 per cent rise in monthly consumption for electricity and 34 per cent rise for gas was the result of Singaporeans spending more time at home during the circuit breaker and early stages of phased reopening, as part of efforts to curb the spread of Covid-19.
In the meantime, the government has provided Singaporean households with more support for their utility bills, he stated.
"We want to make sure that the support is given to families, most in need and hence, the higher quantum in terms of the GST voucher U-safe, that the household in one and two room HDB flats received, compared to those in three and four room."
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Top photo from CNA's YouTube channel and Sean Chin via Flickr