As a resource-constrained country, Singapore relies on imported natural gas for around 95% of our electricity supply. This means that energy developments around the world will impact our domestic electricity prices.
For instance, in the last quarter of 2021 and 2022, there were episodes of extreme volatility in the wholesale electricity market due to the spike in global fuel prices and disruptions in gas supply. As a result, electricity prices increased significantly especially for consumers who were buying at wholesale electricity prices.
Global energy markets remain volatile in view of geopolitical tensions and inflationary pressures. Together with factors such as higher electricity demand in Singapore, wholesale electricity prices may remain elevated.
Consumers who are purchasing electricity at wholesale electricity prices could pay significantly more for their electricity compared to those buying at the regulated tariff from SP Group or via a retail contract from an electricity retailer. Consumers are therefore encouraged to buy electricity from electricity retailers or the SP Group at the regulated tariff for greater price certainty.
Thus, over time, consumers who are signing up or renewing their retail contracts can continue to expect higher electricity rates than before. This reflects the higher cost of fuel and electricity generation, which other countries also face.
