SINGAPORE — The average four-room Housing and Development Board household will pay nearly S$5 more each month for electricity from January to March, as tariffs hit their highest in more than two years.

Announcing the increase for the next quarter on Friday (Dec 29), utility provider SP Group said it was due to higher cost of natural gas for electricity generation, which increased by 14 per cent from the previous quarter.

Tariffs will rise by an average of 6.3 per cent, or 1.26 cents per kilowatt hour, from the previous quarter hit to 21.56 cents/kWh. This is the highest rate since the third quarter of 2015, when the tariff was 22.41 cents/kWh.

This means the average one-room HDB household will pay nearly S$2 more per month from January to March, while the average semi-detached household will pay about S$15 more. Their average monthly bills in next quarter would be S$29.63 and S$258.67, respectively.

Aside from energy costs, tariffs consist of fees for network and market support services, as well as the cost to operate the electricity wholesale market and power system.

It may be the last time that some households have to buy electricity from SP Group, however.

From April next year, some 108,000 households and 9,500 business accounts in Jurong (postal codes starting with 60, 61, 62, 63 and 64) will be able to choose which provider to buy their power from — a break from the current model of getting it from a sole, government-linked provider — which could result in some savings.

The option will be extended to the rest of Singapore in the second half of 2018.

To help consumers compare prices across different electricity retailers, the Energy Market Authority will come up with an online platform by the second half of 2018 that shows the various price plans in the market.

Since 2001, the Government has progressively opened up the electricity market to competition to promote more competitive pricing as well as give consumers more choices.

It started with larger businesses, which could choose to buy electricity from retailers other than SP Group, the corporatised entity of the former electricity and gas departments of the Public Utilities Board.

Currently, businesses with a minimum average monthly consumption of 2,000kWh (equivalent to a monthly electricity bill of at least $400) are contestable.