Waseh so expensive ah???
You probably noticed your electricity bill climbing higher and higher since the summer of 2021. This phenomenon isn’t limited to Singapore; it’s the whole world going through the same problem. With credit card debt, home loans, car loans, this bill increase is definitely not helping. Times are tough when you cannot get a loan from banks!
The cause is a combination of economies reopening post-COVID, which generated an increased demand and lower supply from the nations producing electricity.
If your supplier is Singapore Power, the 8.8% rise translates into 2.06 cents extra per kWh. If you’re getting electricity from OEM, your bill was about 50% more “charged.”
Singapore doesn’t subsidise its electricity so that the accumulating bills can become too much for you. If you need money urgently or is struggling to clear your credit card debt, the best way is to take a low interest fast cash loan. To counter your rising electricity bill, here are a few tips to help.
How Singapore Produces & Prices Their Energy
Almost all of Singapore’s energy, amounting to a massive 95%, is produced with natural gas from Indonesia and Malaysia. Singapore has long-term contracts with these countries, so it has negotiated reasonable prices that depend on the oil price.
Your electricity bill includes the energy price plus additional fees for network maintenance, market support, operations, and administration.
So, Why Has Your Electric Bill Gone Up? Why So Expensive?
EMA (Energy Market Authority) is the regulatory institution for energy in Singapore. According to EMA, electricity bills rose because the worldwide supply shrank, increasing demand.
Additional demand increase is caused by the end of the COVID pandemic and the cold European winter. Conversely, major producers like Russia decreased their supply of natural gas. The West Natuna and South Sumatra gas lines also faced disruptions that further affected the total supply.
As a result, the SGX USEP Quarter Base Load Electricity Futures registered a natural gas price of $461 in January 2022. By comparison, natural gas was approximately $100 in April 2021.
What Will Happen To Your Electricity Bill In The Future?
Europe needs natural gas, but Russia has constantly shrunk its exports during the past two years. Besides, the current military situation in Ukraine is causing more disruptions in Russia’s exports of natural gas, oil and petrol.
On the one hand, Russia could decrease or even halt exports. On the other hand, trading and shipping companies fear physical attacks, payment issues, or even backlash for continuing economic relationships with Russian providers.
However, Australia is the world’s largest LNG exporter and fifth-largest natural gas exporter. Traditionally, Australia exports almost all of its LNG in Asia.
Besides, Australia has kept its gas prices 70% lower than other countries.
Another advantage for Singapore is EMA’s extraordinary measures to counteract the electricity crisis and keep Singapore’s supply stable:
- Setting up a Standby LNG Facility that allows gencos to draw from and make electricity when they can’t get enough natural gas.
- Issuing a directive to gencos to keep enough fuel for power generation based on their current capacities.
- Introducing a new framework so that gencos can proactively manage gas demand. That way, gencos can steer clear from gas curtailment.
How Can You Counteract Your Electricity Bill Increase?
Now that you know why your bills have increased and what EMA is doing to help let’s see how you can help yourself.
1. Track Your Consumption
Imagine sitting down and making your household budget. The first thing you input in your Excel doc is your income. Then, you add your expenses. If you consider everything thoroughly, you’ll know what costs you can cut.
The same paradigm works for your consumption.
You have to know precisely how much energy you’re using and when. A smartphone app can reveal your consumption patterns and how you’re comparing to your neighbours. The result is that you can quickly identify when and where you can limit your energy consumption.
2. Change Your Habits
Now that you know your patterns, it’s time to change your habits. For example, you shouldn’t keep your AC at 21 or 22ᵒC. Raise the indoor temperature to 25ᵒC instead, and see your electricity consumption shrink away. According to research, each added degree accounts for a 6% decrease in your bill.
Pro tip: Don’t leave your AC or your lights on when you’re not home.
3. Install Energy-Efficient Products
Household appliances like your AC, washing machine, and fridge feed on electricity. Therefore, you should replace energy-hungry appliances with energy-efficient ones. Yes, even the lightbulbs.
In Singapore, electronics have energy ratings going from 1 tick to 5 ticks. The products that consume the least energy have four or five ticks, so that’s what you should get to reduce your household’s energy consumption.
Pro tip: Switch your home to LED lighting because LEDs are low consumers and last much longer than regular light bulbs.
4. Adopt a Convenient Electricity Plan
Singapore has an open electricity market, meaning you can choose one of the three providers operating in the country:
- Singapore Power (SP) has a regulated tariff rate, reviewed quarterly. The current price is 27.22 cents for kWk, including GST.
- Singapore Wholesale Electricity Market (SWEM) adjusts its prices every thirty minutes according to the supply-demand landscape. Thus, SWEM is an unpredictable option that wouldn’t benefit you in the current conditions.
- Open Electricity Market Retailers have two payment plans:
- Fixed Price Plans allow you to lock your electricity rate at the current tariff for a period varying from six months to a maximum of two years. The upsides to this plan are its predictability and countering possible future increases. On the downside, you could be paying more than the benchmark price for electricity if the costs were to decrease.
- Discount-off Tariff Plans are the best option before a price fall in the upcoming quarter. If the future electricity prices are lower, your bill will be smaller because you’re not locked into a fixed rate. On the downside, if electricity becomes even more expensive, your bill will climb higher too.
5. Pay Your Bills
Regardless of the electricity plan you’ve chosen, remember to pay your bills. Otherwise, your debt will continue to snowball until it’s virtually impossible to reimburse.
Besides, too many unpaid bills will lower your credit score. That’s a significant disadvantage for future potential loans, such as a car COE or a medical emergency. You’ll also need an emergency fund on standby.
To fix all financial problems, the best solution is to apply for a short term loan from U Credit before your bills escalate out of control. We’ve been helping Singaporeans with financial issues for many years and we offer full customer support through your loan.
Find out more about us and apply here!