Families living in a one-room HDB flat can expect their monthly electricity bill to go up by an average of $1.20.

Owners of five-room HDB flats can expect their power bills to rise by an average of $5.

The average bill sizes are worked out based on the new electricity tariffs, which go up by 1.19 cents per kilowatt-hour (kWh) for all households from the next quarter, starting July 1.

With the new tariff, electricity will cost 25.07 cents per kWh.

This is an increase of about 5 per cent over the 23.88 cents consumers are paying this quarter.

Singapore Power said the increase is due to the higher cost of electricity arising from higher fuel prices.

In the next quarter, tariffs are pegged to a higher forward fuel oil price of US$82.61 (S$113) per barrel.

This is about 11 per cent higher than US$74.40 per barrel in the current quarter.

The electricity tariff is reviewed quarterly and adjusted according to fluctuation in the cost of electricity.

Tariffs have been on the rise since July last year when they increased by 8.83 per cent.

The cost of electricity then was 20.52 cents per kWh.

Tariffs increased by 5.94 per cent and 5.7 per cent during the first and second quarters of this year.

The drop extended a slide from the previous session, amid growing signs that Asian demand could start to falter as countries look to cut subsidies by raising local fuel prices.

United States crude had fallen US$2.02 to US$126.83 a barrel by 0855 GMT (4.55pm in Singapore), after dropping US$3.34 on Tuesday, and taking losses from last week’s record high of US$135.09 to nearly 6 per cent.

Meanwhile, London Brent crude was down US$1.69 at US$126.62 a barrel.

Earlier yesterday, a research paper released by International Monetary Fund economist Noureddine Krichene stated that there was no reason to expect oil prices to decline soon.

The paper said ‘prudent monetary policy’ may be needed to stabilise the oil market. ‘Short-term forecasting would imply persistence of observed trends,’ it added.

‘Given explosive trends in prices of other commodities, depreciating currencies and weakening financial conditions, recent trends in oil prices might not persist further without triggering world economic recession.’

The decline came in the face of supply problems in Mexico and Nigeria that could have driven oil prices higher. That is an indication that demand concerns are weighing on the market and giving investors reason to pull back from the record-high oil prices, analysts said.

Oil has also been knocked off its peak by growing evidence that consumers are struggling to cope with surging prices.

Demand for oil in the US, the top consumer, and other developed countries has been under pressure, and signs are emerging that this trend could spread across Asia as governments in the region take the knife to subsidies.

‘There are signs that soaring energy prices are now starting to cause ripples even in the booming Asian economies,’ said Mr Edward Meir at MF Global.

Mr Michael Lynch, the president of Strategic Energy & Economic Research in Massachusetts, thinks that energy investors are selling because of recent data showing Americans are driving less as a result of high prices.

The latest jump – the 12th consecutive increase since last July – was sparked when oil giant Shell upped petrol prices by five cents a litre and diesel by seven cents at 5pm on Thursday. ExxonMobil and Caltex matched the move six hours later.

Singapore Petroleum Company was the latest to adjust its rates, at 10am yesterday.

The price spikes have come on the back of ever-soaring crude oil prices, which hit US$135 (S$184) a barrel this week. Some analysts predict oil could reach US$200 a barrel.

If that happens, motorists here would be looking at $3 for a litre of petrol, said oil industry analyst Ong Eng Tong.

Mr Ong is predicting that 95-octane will hit $2.50 by the year end. ‘It’s all due to the hedge funds,’ he said, blaming the price spiral on speculative trading in the commodity. ‘They’re predicting oil will hit US$200 a barrel. They’re the ones driving it up.’

The latest increases bring the price of a litre of 92-octane fuel to $2.153 before discount, 95-octane to $2.186 and 98-octane to $2.26. Ultra-premium grades are costlier. Caltex Platinum is going for $2.386 a litre, while Shell V-Power is retailing at $2.379.

The price of diesel, which has been rising more sharply than petrol prices, has hit $1.833 a litre. If not for the duty on petrol – around 44 cents a litre – diesel, which is not taxed, would cost more than 98-octane petrol. This is the case in many countries.

Rising petrol prices have raised annual fuel expenditure for each car owner by around $1,000 in just over a year. But the recent diesel hikes will have a more significant impact on businesses which rely on diesel-powered vehicles.

Cabby Tony Pang, 59, described the diesel price rise – 17 cents a litre in one week – as ‘quite sharp’. He uses about 25 litres of diesel a day, so the last two rounds of adjustment would add $1,530 to his annual fuel bill. Multiply that by the 24,000 taxis here and the impact would be $36.7 million a year.

To add to his woes, Mr Pang said he has noticed a drop in passenger numbers since additional train services were added this week. SMRT started to roll out 700 extra train trips from Tuesday, mainly during lunch time.

Mr V.S. Kumar, 44, managing director of home-grown delivery company Network Express, said his diesel expenditure per week would rise from $250 to $350.

‘Diesel today costs as much as petrol a year ago. It’s very bad, very bad,’ he said with a sigh.

The climb in prices, which have marked new record highs in 10 of the last 14 sessions, has set off alarm bells around the world, although the Organisation of Petroleum Exporting Countries has maintained that the market remains well supplied with crude and that prices are beyond its control.

The US July crude contract extended Wednesday’s more than US$4 surge to reach a high of US$135.04 early yesterday. By 0729 GMT (3.29pm Singapore time), it was trading up US$1.17 at US$134.34 a barrel.

US crude stocks fell 5.4 million barrels to 320.4 million barrels last week, counter to expectations of a small rise in inventories, intensifying concerns about supplies at the world’s biggest consumer just ahead of the start of summer.

Several analysts said the latest step higher in prices had come after companies or traders who sold the market short scrambled to buy back their positions.

Recent bearishness towards the US dollar added momentum to the oil market. The greenback was pinned at one-month lows against the euro after the Federal Reserve cut its growth forecasts for this year.

Caltex and Singapore Petroleum Company (SPC) yesterday raised the price of petrol by two cents a litre, and diesel by 10 cents a litre, setting new record highs. The increase is the fourth since last month and the 10th consecutive climb since July last year.

It brings a litre of petrol as high as $2.33 and diesel to $1.76 at Caltex, operated by United States oil giant Chevron. At SPC, petrol has gone up as high as $2.21 a litre while diesel hit $1.76.

The other oil companies with petrol stations here – Shell and ExxonMobil – are expected to follow suit as oil prices closed above US$125 (S$173) a barrel last week.

The investment followed a recent foray into the lucrative sector by another Singapore investment company, Temasek Holdings, and came as oil traded at unprecedented prices.

GIC said yesterday it met AEI late last year when the American firm was seeking to raise capital.

A spokesman said GIC ‘sees it as an opportunity to make a substantial investment in AEI until the American firm achieves a stock exchange listing’.

He added that the investment would help GIC gain exposure to the growing energy infrastructure markets of the developing world, the focus of AEI’s business.

GIC Special Investments, GIC’s private equity arm, purchased the shares from AEI and some of its shareholders.

Mr George Kay, vice-president of GIC Special Investments’ London-based global infrastructure group, has been appointed to AEI’s board.

Privately-held AEI owns energy infrastructure businesses in several emerging markets, including China, Mexico and Argentina. Its revenues last year exceeded US$3.2 billion.

Temasek recently set up a unit to invest in energy exploration and development.

United States crude for delivery next month rose as much as US$2.51 to US$126.20 a barrel. London Brent crude rose US$2.81 to US$125.65 per barrel.

Wall Street opened sharply lower, in response to the latest hike and news that insurance giant AIG had reported a deeper-than-expected quarterly loss.

At 11pm Singapore time, the Dow Jones Industrial Average was down 89.56 points at 12,777.22.

‘I’m not particularly surprised by the speed of the rise in crude. There are many market bulls hoping for prices to rise heading into the summer,’ said Mr Tetsu Emori, a fund manager at Astmax in Tokyo.

Gains in US crude picked up momentum after distillate stocks in America, notably diesel, fell.

The US said on Wednesday that domestic distillate stocks, which include diesel, fell by 100,000 barrels last week, against forecasts for an 800,000-barrel rise.

The tightness in the stocks was also highlighted after Royal Dutch Shell looked set to shut its second-largest crude distillation unit and two secondary units at its Singapore plant next month for routine maintenance.

Tapping the sun’s energy has just been made easier for building owners.

The Government yesterday announced details of a $20 million scheme that could see as many as 100 solar projects sprout around Singapore in the next two years.

The carrot being dangled in front of private developers and building owners is a subsidy that trims the cost of a solar project by 30 per cent to 40 per cent.

The grant is capped at $1 million for each project.

Solar projects usually cost from $100,000 to a few million dollars, depending on the scale and technology used.

‘This is a very attractive offer… We expect keen interest from the industry,’ said Economic Development Board (EDB) managing director Ko Kheng Hwa, who unveiled the initiative yesterday at the annual Semicon Singapore conference at Suntec City.

The top priority of the Solar Capability Scheme, said Mr Ko, is to build up a critical mass of projects so as to develop manpower capabilities in Singapore’s fledgling solar industry.

‘We are focusing on boosting the demand side…so the local professionals will learn how to design good solar systems.’

The scheme, first mooted by Senior Minister of State for Trade and Industry S. Iswaran in Parliament in March, is the Government’s latest answer to increasing calls for incentives to kick-start the solar industry.

The sector has attracted headline investments in the last year, including a $6.3 billion giant solar manufacturing plant that Norwegian firm Renewable Energy Corp is building.

‘This scheme will go a long way in building up critical capabilities among various players in the solar energy ecosystem,’ said Mr Ko.

It starts with immediate effect and applies to new private buildings that meet a minimum Green Mark Gold standard, according to the EDB.

The Green Mark is a rating system developed by the Building and Construction Authority that rates buildings for their environmental impact and performance.

Developers like City Developments have already incorporated solar systems into new condos, which have been given the Green Mark stamp of approval.

Some factors that will determine the grant size include innovation, design, effectiveness and skills development, said Mr Ko.

The EDB also announced yesterday a new international advisory panel for clean energy that will hold its first meeting next month.

Industry players like Mr Christophe Inglin, the managing director of solar firm Phoenix Solar, hailed the new scheme, saying: ‘It’s the best news the industry has received for some time.

‘We’ve seen an increase in interest in solar systems. Hopefully, this boost will convince clients that solar is the way to go.’

Supply disruptions in Nigeria, where a strike and attacks by militants have hit production, helped boost a market that is nervous about any threats to supply.

Adding to the tense climate was Iran, the world’s fourth-biggest oil producer, when it refused to accept intrusive inspections of its nuclear programme, which the West fears could be linked to weapons.

US light crude for June delivery rose as much as US$2.03 to US$122, while London Brent crude climbed US$2.36 to a record US$120.35.

Goldman Sachs has predicted that oil could soar towards US$150 to US$200 a barrel because of a lack of adequate supply growth.

‘The possibility of US$150 to US$200 per barrel seems increasingly likely over the next six to 24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,’ the bank said.

Oil has nearly doubled in the past year and is up by a quarter since the start of this year, partly because of the problems in Nigeria, as well as weakness in the US dollar, which has boosted the price of commodities.

While rice has grabbed the headlines, the price of cooking oil has also been on a steady march north, driven by failed crops and competition from new-age biofuels.

In the last two months, retail prices have jumped between 9per cent and 56 per cent, depending on the brand, according to a survey released yesterday by the Consumers Association of Singapore (Case).

The cheapest oil available to consumers at major supermarkets here is the Cabbage brand of vegetable oil at $4.90 per 2kg bottle.

But even this is up from $4.50 in March. Its Knife brand counterpart – a premium brand – costs almost twice as much, according to the Case study, which was based on checks at eight supermarkets.

The association’s survey is the first on monthly food prices and will be published on its website, www.case.org.sg.

Rising retail prices reflect a global trend in increased edible- oil prices, say importers.

They have seen prices more than double in the last three years. A tonne of refined liquid palm oil – the industry benchmark – costs US$1,200 (S$1,630), up from about US$450 in 2005.

Recent reports show that global edible oil prices rose 15 per cent in the first two months of this year.

The price increases have been driven by decreased crop yields due to climate change and competition from biofuels, which are made from the same plant extracts.

Said Mr Wong Mong Hong, deputy president of the Food Manufacturers Association: ‘I have been in the industry for 38 years and this is the second time prices have been this high. The last time was in 1982 when there was a palm-oil shortage. This time, biofuels are the culprit.’

He said about 12 per cent of cooking oil produced by the world is now being directed to biofuels, a much-touted and clean-burning alternative to fossil fuels.

Demand for biofuels is expected to expand by almost 20per cent per year through 2011 despite recent concerns about their impact on the environment and world food supplies.

Price-conscious consumers ‘can get around the price hike’, said Case president Yeo Guat Kwang, by ‘looking at their budget and comparing prices at different supermarkets’.

He said: ‘Vegetable oil is among the cheapest kind of oil, while other types of oil, like sunflower oil and canola oil, are more expensive.’

However, vegetable oil, popular with hawkers, is still prone to wild jumps.

Said Mr Wong Shu Kiat, 43, owner of a coffee shop in Serangoon: ‘Prices have fluctuated from about $10 to about $40 these three months. It cannot be helped. What matters is business must be good.’

Mr Chen Kern Wuan, president of the Newton Hawker Centre Stallholders Association, said hawkers usually refrain from changing the types of oil they use. But they may soon have to.

Mr Chen added: ‘We will think of switching types of oil if things get worse, but we try not to do that because the taste of our food might change.’