The key natural resource input that goes into the generation of electricity in Singapore is natural gas. All of Singapore’s power plants predominantly use natural gas to generate their electricity. Hence, one would think that it would be natural to peg to price of natural gas, to the price of natural gas. But in Singapore, the price of natural gas, alas, is pegged to oil!!! Is it no wonder, then, that our electricity prices have seen their greatest hike in recent times?

Just have a look at the chart of Natural Gas Futures traded on Nymex: the prices have fallen by half since June this year.

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