Question No. 852 in Notice paper No. 276 of 2008
Name and Constituency of Member of Parliament
Mr. Seah Kian Peng, Member for Marine Parade GRC
Question
To ask the Minister for Trade and Industry whether the Energy Market Authority will be reviewing the tariff-setting mechanism in determining the electricity tariffs to better reflect prevailing fuel prices in the market
Answer
At the last Parliamentary session, I had informed the House that the Energy Market Authority (EMA) would study whether the formula for tariff-setting can be further improved. Any change to the formula should take into account how electricity tariffs can be more reflective of the prevailing market price for oil, while minimizing volatility so that consumers would not be faced with large adjustments frequently. EMA is now studying the tariff-setting formula, and targets to complete its review by the middle of next year.
At the last Parliamentary session, I had informed the House that the Energy Market Authority (EMA) would study whether the formula for tariff-setting can be further improved. Any change to the formula should take into account how electricity tariffs can be more reflective of the prevailing market price for oil, while minimizing volatility so that consumers would not be faced with large adjustments frequently. EMA is now studying the tariff-setting formula, and targets to complete its review by the middle of next year.
The 3-month forward fuel oil price has dropped significantly over the last month. Hence, as the Prime Minister mentioned yesterday, we can expect a reduction in the electricity tariff for the coming quarter of January to March 2009. Besides fuel costs, the electricity tariff also includes non-fuel costs of generation; transmission and distribution costs; and miscellaneous fees like meter reading and billing. The exact tariff will be known in the first week of December, after these components are computed and finalized.