City Gas said yesterday that the gas tariff for households would be increased by 3.3% from 1st May 2012. This translates to an increase from 21.45 cents to 22.16 cents per kilowatt hour (kWh).
While 3% might not sound like a lot, gas rates have actually gone up from 17.99 cents per kWh last year to 22.16 cents per kWh now. This is a whopping 20%+ increase.
Every quarter, gas tariffs are reviewed based on guidelines set by the Energy Market Authority (EMA). At the rate things are going, inflation is going to eat all of us alive.
The interesting thing is that the price of natural gas is actually at a 10-year low.
Unfortunately, when the gas contracts for S’pore were negotiated many years ago, the price of the gas that S’pore has to pay was based on the price of oil. So, even though the price of gas has collapsed, we have to pay more as the price of oil has been going up. Sigh.