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Electricity price is shooting through the roof

Electricity price is shooting through the roof and the government is not going to help much, since it is due to market forces and the industry is run by private companies.

In the first place, should something as basic as electricity, even be privatized?

Prior to 1995, electricity was supplied by the government via the Public Utilities Board (PUB). Even if wholesale prices shot through the roof, the government mitigated the increase, as it was expected or else they would be punished come elections. But with privatization, they can more or less absolve themselves and blame the market, how convenient.

The common refrain is that privatization leads to more efficiency, better allocation of resources and therefore lower prices for the consumer.

But with electricity as well as many other public good, is that the case?

The Singapore market is compact. Breaking up the market and outsourcing to several vendors is only going to reduce economy of scale. These middlemen do not produce anything other than add to administrative cost for which they extract a profit. They are akin to leeches slowly sucking the blood out of our lives, insidiously.

Since the 80s, a major portion of GDP growth has been fueled by selling public good previously supplied by the government to crony businessmen and investment funds. Think SingTel, SBS, SP Group, SMRT, the list goes on.

In fact, if the government and investors have their way, they would privatize every public good, because by definition, these are basics and therefore indispensable. Such a business is a godsend if you can lay your hands on it.

Just think of all the public good that were once free or subsidized but which now charges market rate and you know why Singapore is a very expensive country to live in. As long as you breathe, you have to pay. Is it any wonder that working folks have to work incessantly just to live?

What is worse is that many of these privatized companies are controlled by Temasek, a supposed private holding company but funded by taxpayers money. It has far reaching powers on how the country and economy is run, but is not accountable to the people as it is a private company. It’s like a proxy totalitarian government, except you can’t vote it out.

The privatization of entities competing in the international market, like SIA, NOL, PSA probably makes sense as they have to compete for customers internationally. But the privatization of public good sold to a small captive market within the country is very difficult to justify.

 

Foong Swee Fong

 

 

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READER COMMENTS BELOW

8 Responses to “Electricity price is shooting through the roof”

  • agreed:

    Agreed..it lead to high COL….and more suffering for the lower group.

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  • Sinkies are basically rich, well at least 70% are, so this group can well afford the price even if it is a manyfold increase.

    As for the remaining 30%, lan lan lor or move to Johor, as many have suggested.

    Don’t expect the lightning to care or do anything, because Sinkies are mere digits to them.

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  • rice:

    WHAT IS GOING DOWN?!
    EVERYthing is going up in price$,more increa$es to come!
    So ea$y,just blame “supply chain” !
    So,COE INCREASES OWING TO SUPPLY CHAIN also?
    Nothing to do with BAD POLICIES THAT WORK AGAINST OWN CITIZENS ?

    So,$100B covid budget,many needy got only $600 while many non-sgFTs got many times more,again,Supply issue?
    Oh come on,i believe our smart govt can do better than this?

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  • Symbol:

    “The bolt of lightning is a traditional symbol of sudden illumination and the destruction of ignorance; it also represents a punishment of humans by the gods from the skies, most commonly attributed to Zeus, king of the gods.”

    Lightning is good for plants but not for people!

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  • 2Daft2Live:

    First, they take away your right to protest, to demonstrate in public. Then, they take away your right to criticize their rule and policies. Next, they take away your right to your own savings and where you can spend your money for medical treatment. Bit by bit, those rights like affordable public housing, education, public transportation, medical care and so on are taken away, not because the MIW can. But simply because the daft ones didn’t bother to fight for themselves. They are still waiting for some miracles; most will die waiting. Heaven only helps those who help themselves.

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  • opposition dude:

    PAP’s lousy excuse when it comes to privatisation is that it creates competition and will be good for the consumer. Which is true. Up to a point that is. We had something like 20 electricity providers when the market was opened up. In less than 2 years a number of them folded since they couldn’t get enough customers to stay in business.

    But all these companies have to buy the electricity from, you guessed it, SP Group which produces the electrcity. So when tariffs go up and down it’s all SP’s doing. Some of the resellers might make customers sign a 2 year contract which they pay a fixed price but whether one saves much from this deal is uncertain.

    Like people have said, you want things to get better then you better bloody start voting more of PAP out. Otherwise you will continue to pay high prices for everything.

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  • Bluff People:

    I believe all this corporatisation started when Richard Hu was finance minister and mandated that ministries and stat boards have to recover their own costs.

    That’s why utility prices go up when the suppliers build new infrastructure — we end up paying for such projects. Ditto hospitals, HDB flats, other public goods and services. All aimed at cost recovery.

    Makes you wonder what the govt pays for. The reality is we’re an economy, not a country

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  • Not enough:

    Electrocute the voters
    they want more pain
    bring it on
    zap zap zap zap zap zap the life and shit out of them

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