Electricity tariffs up 2% from April, with full cost impact yet to come

Business consumers are warned of 'higher and more volatile' energy costs.

Overall electricity tariffs, including for non-households, will rise by an average of 2.0% or 0.52 cent per kWh from 1 April to 30 June, before goods and services tax (GST), due to higher energy costs, according to SP Group.

Meanwhile, electricity tariffs for households will increase by 2.1% or 0.56 cent per kWh, before GST. The average monthly electricity bill for families living in HDB four-room flats will go up by $1.80.

The group said they review the electricity tariffs every quarter based on guidelines set by the Energy Market Authority (EMA), with the energy cost component determined using average natural gas prices in the first two and a half months of the preceding quarter.

For the April to June period, tariffs are based on gas prices from 1 January to 15 March, which incorporate the increase in natural gas prices due to the Middle East conflict only from 28 February.

Meanwhile, the EMA said that electricity and town gas tariffs are expected to increase further in subsequent quarters as elevated fuel costs are fully incorporated.

“We cannot predict how long the conflict in the Middle East will last. Household and business consumers must therefore be prepared for higher and more volatile energy costs,” it added.

Fuel prices are also likely to remain elevated in the near term due to continued disruptions to oil and gas production. Consumers on electricity retail contracts may also face higher prices upon renewal.

The authority is monitoring the situation and working with the industry to ensure supply security.