11 February 2009

Representative Fuel Oil Reference Price - Part II

An earlier post on the above-mentioned subject dated 12 November 2008 was published in the forum page of the local press on 13 November 2008.

During the Committee of Supply debate (Ministry of Trade and Industry) on 9 February 2009, Senior Minister of State (Trade and Industry) Mr S Iswaran announced that Energy Market Authority would be revising the formula by using the average of fuel oil prices in the preceding three months to determine the tariff for the current quarter, beginning with the third quarter of 2009.

He said that the new approach had two advantages.  Firstly, it would help to reduce the volatility of the electricity tariff by averaging fuel oil prices over a longer period.  Secondly, with a three-month average, more recent fuel price data would be used to determine the tariff.  This would allow the tariff to be more reflective of the prevailing market prices of fuel.

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