Oral reply to PQ on Electricity Tariffs and Gas Prices

Question

Mr Liang Eng Hwa: To ask the Minister for Trade and Industry (a) what is the basis for the latest increase in electricity tariffs and gas prices; (b) whether the consumption of electricity and gas has increased as more residents work from home; and (c) whether increased development in alternative sources of energy has helped reduce the overall cost of electricity for consumers.

Oral Answer (to be attributed to Second Minister for Trade and Industry Dr Tan See Leng)

1.         Mr Speaker, electricity tariffs and gas prices generally move in tandem with global fuel prices, and have averaged at around 24.58 cents/kWh and 19.64 cents/kWh respectively, since January 2018. Since dipping to their lowest levels in the past 20 years in April 2020, fuel prices rose by 46.6% in the third quarter of 2020, as global economic activity gradually resumed. The electricity and gas tariffs therefore rose to 22.93 cents/kWh and 18.39 cents/kWh in the fourth quarter this year, as fuel prices rebounded. 

2.         However, the electricity and gas tariffs in the third and fourth quarters of 2020 remain lower than in Q1 2020, and are amongst the lowest since January 2018. For electricity tariffs in particular, it is also worth pointing out that the Q4 2020 tarifffs remain 11.6% lower than Q1 2020 and 6.7% lower than the average electricity tariff between January 2018 and September 2020. Around 47% of all households will also not be affected by the new tariff prices, as they have already switched to the Open Electricity Market.

3.         Alternative energy sources constitute a small proportion of our power generation today due to our natural geographical limitations. However, the Singapore Government is actively partnering industry players to deploy more solar power to enhance our energy resilience, competitiveness and sustainability. We aim to increase our solar capacity by five-fold from around 0.4 gigawatt-peak (GWp) today, to achieve at least 2 GWp by 2030, which will contribute to around 3% of our energy consumption in 2030. Consumers interested to procure solar power can do so by engaging our local solar companies.

4.         Households’ average monthly electricity and town gas consumption from April to July 2020 was 16% and 34% higher compared to the same period last year respectively, as Singaporeans spent more time at home during the circuit breaker period and early stages of our phased reopening, as part of our national efforts to manage local community transmissions of COVID-19.

5.         We have provided Singaporean households with more support for their utility bills this year. Every household with at least one Singapore Citizen received a one-off $100 Solidarity Utilities Credit in their July or August SP Group utility bill. The GST Voucher – U-Save that eligible households receive has also been doubled this year through a one-off GST Voucher – U-Save Special Payment. Eligible HDB households with five or more members also received a first tranche of further GST Voucher – U-Save rebates of between $60 to $100 per household in October, with a second tranche to be disbursed in January 2021.

6.         Before this year, the annual amount of GST Voucher – U-Save that households in 1- and 2-room HDB flats received was equivalent to about three to four months of their utilities bill. Those living in 3- and 4-room HDB flats received support equivalent to about one to two months of their utilities bills on average. With the additional support this year, households in 1- and 2-room HDB flats will receive support equivalent to at least six to eight months of their utilities bills on average, and households living in 3- and 4-room HDB flats will receive support equivalent to at least two to four months of their utilities bills.