<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Oct 21, 2008
</TR><!-- headline one : start --><TR>Cheaper power in January? <!--10 min-->
</TR><!-- headline one : end --><TR>Tariffs could fall if oil prices continue to slide: Iswaran </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Goh Chin Lian
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Electricity tariffs could fall in January, if fuel oil prices continue to slide in the last three months of this year. -- PHOTO: HDB
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<!-- START OF : div id="storytext"-->ELECTRICITY tariffs could fall in January, if fuel oil prices continue to slide in the last three months of this year.
Senior Minister of State (Trade and Industry) S. Iswaran also said on Tuesday that despite the 21 per cent hike in this quarter's tariffs, households have paid less for electricity under the current pricing policy than if another formula had been used.
Mr Iswaran was replying to five MPs who had questioned the need to raise power prices by 21 per cent and had asked for the pricing formula.
MPs Ellen Lee (Sembawang GRC) and Ho Geok Choo (West Coast GRC) reflected a common ground sentiment when they asked why electricity rates had gone up at a time when oil prices had come down.
Mr Iswaran linked it to a three-month time lag in the current formula, which pegs tariffs to the price of fuel oil for delivery in three months' time.
'If the current lower fuel oil prices are sustained, the benefits will flow through with the same time lag to electricity tariffs in the next quarter,' he said.
He also distributed a chart to show that this way of pricing is less volatile, and costs less to households, than a formula based on the price paid for immediate delivery of fuel oil, or spot price.
The three-month forward price has been lower than the spot price in all but five of 16 quarters since 2004, he noted.
Even so, the regulator, the Energy Market Authority (EMA), is studying whether the formula can be improved further, he said. Read the full story in Wednesday's edition of The Straits Times.
</TR><!-- headline one : start --><TR>Cheaper power in January? <!--10 min-->
</TR><!-- headline one : end --><TR>Tariffs could fall if oil prices continue to slide: Iswaran </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Goh Chin Lian
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
Electricity tariffs could fall in January, if fuel oil prices continue to slide in the last three months of this year. -- PHOTO: HDB
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"-->ELECTRICITY tariffs could fall in January, if fuel oil prices continue to slide in the last three months of this year.
Senior Minister of State (Trade and Industry) S. Iswaran also said on Tuesday that despite the 21 per cent hike in this quarter's tariffs, households have paid less for electricity under the current pricing policy than if another formula had been used.
Mr Iswaran was replying to five MPs who had questioned the need to raise power prices by 21 per cent and had asked for the pricing formula.
MPs Ellen Lee (Sembawang GRC) and Ho Geok Choo (West Coast GRC) reflected a common ground sentiment when they asked why electricity rates had gone up at a time when oil prices had come down.
Mr Iswaran linked it to a three-month time lag in the current formula, which pegs tariffs to the price of fuel oil for delivery in three months' time.
'If the current lower fuel oil prices are sustained, the benefits will flow through with the same time lag to electricity tariffs in the next quarter,' he said.
He also distributed a chart to show that this way of pricing is less volatile, and costs less to households, than a formula based on the price paid for immediate delivery of fuel oil, or spot price.
The three-month forward price has been lower than the spot price in all but five of 16 quarters since 2004, he noted.
Even so, the regulator, the Energy Market Authority (EMA), is studying whether the formula can be improved further, he said. Read the full story in Wednesday's edition of The Straits Times.
