Reply to SP Services: Don't shoot the messenger

Posted at request of Vincent Sear

Editor
Today paper

I refer to the article November 1-2, 2008: "SP Services" Don't Shoot The Messenger."

The essence of the matter is, even if SP Services is just the middleman or "messenger" as it now calls itself, how can electricity tariffs be based on US$155 per barrel of oil as announced by SP Services itself it September 2008, to justify a 22% price hike based on "forward pricing"?

Now, SP Services is claiming "average price." Whatever, be it forward pricing or average price, how come Singapore households and businesses are billed based on a much higher price? Oil price hit a peak of US$147 per barrel in July 2008 and has been falling thereafter.

How come Singapore consumers are billed based on US$155 per barrel for the quarter of October to Decemeber 2008 when oil price never hit that high? What's going on between the power generating companies (gencos) and SP Services and the Energy Market Authority (EMA)?

Oil price is now about US$70 per barrel or below. Can Singaporeans expect a corresponding 55% cut in tariffs and bills?

Vincent Sear