During his Mandarin National Day Rally speech on Sunday (Aug 19), Prime Minister Lee Hsien Loong decided to take a straw poll of the audience by asking them if the current electricity tariffs has increased or decreased, compared to 10 years ago.
Many were unsure and hesitated; and the vote was split quite evenly by those who eventually made a stand.
PM Lee then went on to present a series of graphs which showed the rise and fall of tariffs over the years.
As it turned out, in the third quarter of 2008, a kilowatt hour (kwh) cost 25.07 cents; while the current price is indeed lower at 23.65 cents per kwh.
“Unfortunately, we all remember vividly when the electricity tariff goes up, but when the tariff comes down, we forget quickly,” PM Lee quipped, to laughter from the audience.
On a more serious note, he then added that electricity prices are difficult to control in Singapore because the country imports almost all of its energy. And because electricity is generated from natural gas, the cost fluctuates according to global oil prices.
PM Lee explained the government cannot fix a low tariff because Singapore is not an oil producer and the move would require costly subsidies that would not make financial sense in the long run. Also, bigger subsidies would benefit the rich as they consume more energy.
He concluded that it would be more effective to give utilities subsidies to lower- and middle-income families. This is currently done via U-Save rebates.