Coffee Shop Talk - Crude, EMA, and SP Subscribe
From: Isachenkov Nov-27 9:57 pm
To: ALL (1 of 1)
14585.1
ELECTRICITY bills for Singapore households will go up by about 21 per cent from Wednesday - the highest one-time increase in seven to eight years - due to higher oil prices.
With this latest tariff revision, families living in one- to three-room Housing Board flats will see their utilities bills for this year rising from $90 to $223, said the Energy Market Authority (EMA), which regulates the electricity and gas industry here on Monday.
But the government rebates of $310 to $330 will more than cover the increases for these homes.
Those living in larger homes will face higher monthly bill ranging from $316 to $433.
The government rebates for these households range from $130 to $295, hardly enough to cover the increase for half of these homes.
Chief executive of EMA Mr Khoo Chin Hean, said at a press briefing on Monday that the higher tariffs have been due to the increase in oil prices.
EMA said the projected fuel oil price for the next three months is set to jump to $155.14 a barrel, up 38 per cent from $112.35 for the current quarter.
Fuel costs make up about 60 per cent of electricity tariffs, which are reviewed quarterly and adjusted according to changes in the cost of electricity.
The other 40 per cent includes the cost of generating electricity, maintenance and equipment.
Since 2004, electricity tariffs here have been pegged to projected oil prices for the next three months instead of current oil prices.
Mr Khoo said the old practice made the cost of electricity very volatile.
For households, the new tariff will be about 30 cents per kiloWatt-Hour, up from about 25 cents.
http://www.straitstimes.com/Breaking+News/Singapore/Story/STIStory_284015.html
The above was announced in late Sept 2008 to let the public know of SingPower’s price hikes for household electricity prices. Based on EMA’s Forward Fuel Oil Price (FFOP) policy, we pay based on a projected price of fuel, for every quarter (3 months). In other words, we pay the projected fuel price, not the current fuel price. The projected fuel pricetag for the months Oct, Nov and Dec (??) was as above. So your electricity’s bill is based on that price, not the actual price. There is a very interesting article by SkyJuice on the topic of Forward Fuel Oil Price if you want to know more.
Fast forward 2 months and now crude is trading at USD$50. A difference of more than USD$100. In other words, we’re now paying USD$150 for something that costs USD$50. A 300% markup.
Mr Khoo of the EMA says that this system is better as it’s less volatile. Sure… Less volatility in this case also translates to less mobility and flexibility. For a small country like Singapore where everything sways with the global winds, can something as small as a miniscule speck that is the EMA of Singapore afford to be immobile and inflexible? What are our competent leaders for if not to chart the small vessel called Singapore, keeping Singapore agile and mobile in the stormy seas of the global economy? Paying for something at a 300% markup for something so basic as electricity is absurd.
Come Jan 2009, it is very likely crude oil price will hover around this range (if not lower) as the global economy will not be bouncing back until late 2009 earliest. Will the EMA project the fuel price at USD$50? We shall see.
FFOP has only been adopted since 2004 and the current situation shows that being diversified, mobile and flexible are key to survivability. The woes of petrol and electricity have only been of late more and more of concern to the general public. Is this policy really for the better or merely a way to keep EMA employees employed and loafing on the job?
As SkyJuice points out, “The quotation clearly shows that there are not more than 300 bids/offers and 11 deals were settled in the month of July 2008. The highest quote was US$795 per metric tonne (or US$120 per barrel) and the lowest quote was US$698 (or US$105 per barrel). Note that the US$155 per barrel used by EMA is 30% and 50% more than the ICE’s highest and lowest quote respectively.” Indeed.
Perhaps it’s time to rethink.
From: Isachenkov Nov-27 9:57 pm
To: ALL (1 of 1)
14585.1
ELECTRICITY bills for Singapore households will go up by about 21 per cent from Wednesday - the highest one-time increase in seven to eight years - due to higher oil prices.
With this latest tariff revision, families living in one- to three-room Housing Board flats will see their utilities bills for this year rising from $90 to $223, said the Energy Market Authority (EMA), which regulates the electricity and gas industry here on Monday.
But the government rebates of $310 to $330 will more than cover the increases for these homes.
Those living in larger homes will face higher monthly bill ranging from $316 to $433.
The government rebates for these households range from $130 to $295, hardly enough to cover the increase for half of these homes.
Chief executive of EMA Mr Khoo Chin Hean, said at a press briefing on Monday that the higher tariffs have been due to the increase in oil prices.
EMA said the projected fuel oil price for the next three months is set to jump to $155.14 a barrel, up 38 per cent from $112.35 for the current quarter.
Fuel costs make up about 60 per cent of electricity tariffs, which are reviewed quarterly and adjusted according to changes in the cost of electricity.
The other 40 per cent includes the cost of generating electricity, maintenance and equipment.
Since 2004, electricity tariffs here have been pegged to projected oil prices for the next three months instead of current oil prices.
Mr Khoo said the old practice made the cost of electricity very volatile.
For households, the new tariff will be about 30 cents per kiloWatt-Hour, up from about 25 cents.
http://www.straitstimes.com/Breaking+News/Singapore/Story/STIStory_284015.html
The above was announced in late Sept 2008 to let the public know of SingPower’s price hikes for household electricity prices. Based on EMA’s Forward Fuel Oil Price (FFOP) policy, we pay based on a projected price of fuel, for every quarter (3 months). In other words, we pay the projected fuel price, not the current fuel price. The projected fuel pricetag for the months Oct, Nov and Dec (??) was as above. So your electricity’s bill is based on that price, not the actual price. There is a very interesting article by SkyJuice on the topic of Forward Fuel Oil Price if you want to know more.
Fast forward 2 months and now crude is trading at USD$50. A difference of more than USD$100. In other words, we’re now paying USD$150 for something that costs USD$50. A 300% markup.
Mr Khoo of the EMA says that this system is better as it’s less volatile. Sure… Less volatility in this case also translates to less mobility and flexibility. For a small country like Singapore where everything sways with the global winds, can something as small as a miniscule speck that is the EMA of Singapore afford to be immobile and inflexible? What are our competent leaders for if not to chart the small vessel called Singapore, keeping Singapore agile and mobile in the stormy seas of the global economy? Paying for something at a 300% markup for something so basic as electricity is absurd.
Come Jan 2009, it is very likely crude oil price will hover around this range (if not lower) as the global economy will not be bouncing back until late 2009 earliest. Will the EMA project the fuel price at USD$50? We shall see.
FFOP has only been adopted since 2004 and the current situation shows that being diversified, mobile and flexible are key to survivability. The woes of petrol and electricity have only been of late more and more of concern to the general public. Is this policy really for the better or merely a way to keep EMA employees employed and loafing on the job?
As SkyJuice points out, “The quotation clearly shows that there are not more than 300 bids/offers and 11 deals were settled in the month of July 2008. The highest quote was US$795 per metric tonne (or US$120 per barrel) and the lowest quote was US$698 (or US$105 per barrel). Note that the US$155 per barrel used by EMA is 30% and 50% more than the ICE’s highest and lowest quote respectively.” Indeed.
Perhaps it’s time to rethink.
