It’s an unfortunate fact of life that the cost of living will keep rising.
As my grandfather used to lament: why am I paying more for the same thing I bought yesterday?
But as prices for suppliers rise, so will the cost for consumers.
And just like bubble tea, this particular expense is something we can cut down on, but can’t live without.
S’pore Households’ Electricity Bills Likely To Stay High Due To Rising Costs
If you’re the one that pays the bills in your house, you’re probably aware that electricity has been pretty steep lately.
Sadly, it seems that this price spike may not be temporary.
Just two months ago, prices for 12-month plans ranged from 19.5 cents to 20.5 cents per kilowatt-hour (kWh).
Now, these prices have shot up to around 21.2 cents to 23.7 cents per kWh, according to The Straits Times.
This means that a typical four-room HDB flat would have to pay between $91
and $102 now for such a plan, compared to around $83 to $93 in July.
Reasons For Price Spike
The reason for the spike in electric prices is manifold.
For one, rising fuel costs have forced electricity suppliers to hike up their prices. With all the lockdowns imposed last year, the demand for gas plunged. It has since not only recovered but increased to multi-year highs.
Some companies with older power generation plants have also had to deal with higher maintenance costs.
A Rise in Electricity Tariffs
Another reason is the higher electricity tariff, which rose for the July to September period.
Back in June, it was announced that the tariff on electricity would rise 3.8% for this period as compared to the previous quarter.
Excluding GST, the tariff for households increased from 22.55 cents to 23.38 cents per kWh for this quarter.
This alone led to a S$3.04 increase in the average monthly electricity bill for a four-room flat.
Options, Options, and More Options
It may be hard to believe now, but before 2018, there was only one supplier of electricity to households in Singapore – SP Group.
But then the Open Electricity Market (OEM) was launched by the Energy Market Authority and everything changed.
For the unacquainted, the OEM is an initiative that allows consumers to enjoy more choices and flexibility when buying electricity.
Now, customers can choose from 12 retailers, depending on which best suits their needs.
At the moment, customers can choose between a fixed-price plan and a discount-off-tariff option.
The first option has protected many from the recent rise in prices since their plan has a fixed or constant rate. However, prices for their plan will likely increase once they have to renew.
Those who go for the discount-off-tariff option will get a discount off the current tariff but will be subject to the whims of the electricity market.
Suppliers typically provide contracts from six to 24 months for these plans.
Read Also:
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Feature Image: spaxiax/ Shutterstock.com
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