i just want to give some clarification,having worked in this
line a number of years:
the price of electricy in Singapore is primarily determined by
the gas agreements we've signed with Indonesia
(almost all our electricity is now gas fired) some years
back. The pricing mechanism is pegged directly to
the price of oil in the spot market. very much like the A+B (oil
price) formula quoted above. there are some other
factors that go into the A and B parts, including US Fx rates,
but the run up in oil is the overwhelming factor in the
huge increase in rates we've seen the past year or so.
for eg, USD has fallen about 20% (from ~1.6 to 1.35) compared to
a year ago. however oil now is almost 60% higher ($106 compared to
~$65 for the period used to determine the oil price when deciding
the rates) in the same period. so you can roughly expect rates to
be about ~ 0.8*1.6 =30 % higher compared to a year ago. its not
exact but roughly speaking if you want to know your rates in the
future, just keep track of the USD and NYMEX crude oil prices to
get a ball park figure for rate increases (or decrease if the oil
price goes down0.
whether the pricing mechanism was a good deal or not, the
contract was signed a long time back, and is open for discussion
but do remember how difficult it will be to renegotiate contracts
especially when energy prices now are so high.
