In TODAY's "Point of View" (30 Oct 2008), Mr Chan Chong Leong asked why Singapore had a higher electricity tariff than Hong Kong.

The main reason is that the fuel we use for power generation is more expensive. In particular, fuel charges make up 19 cents per kilowatt-hour of the overall electricity tariff in Singapore, but just 5 cents per kilowatt-hour in Hong Kong.

Hong Kong enjoys this significant cost advantage in fuel largely because more than half of its electricity is generated from coal-fired power plants. Coal is cheaper than oil and natural gas, but it is also a dirtier fuel. Hence, the price of this heavy reliance on coal is felt in the impact on air pollution and quality of life. Another 10 per cent of Hong Kong's electricity comes from nuclear power plants in China which are unaffected by the high global oil price.

In contrast, Singapore's electricity is generated predominantly using imported natural gas, which is indexed to the fuel oil price by commercial contracts. We also do not have a ready source of low-cost energy supplies from our neighbours.

Any comparison of electricity prices across jurisdictions will have to take into account these variations in fuel mix and supply. In fact, our electricity tariff is lower than or comparable to that of countries such as Ireland and Japan which, like Singapore, are highly dependent on imported oil and natural gas to meet their electricity needs.

Point of View (Today)

I refer to "We are a power service provider" and "Tariff revision no benefit to power generation companies" (Oct 28). I commend both Singapore Power and Energy Market Authority for their replies. While their explanations are clear as to who undertakes what role in the complicated matter of supply of electricity to Singaporeans, unfortunately, at the end of the day, we are still as confused as ever as to the reasons why our rates are so much higher than those in Hong Kong. Any party care to reply to this simple question?

Chan Chong Leong