Singapore electricity tariff to go up next quarter

Electricity in Singapore will cost more from July to September, due to higher fuel oil prices. It will be up by an average of 3.24% or 0.66 cents per kWh. Domestic users, for example, will have to pay 21.15 cents for every kWH of electricity, up from 20.49 cents currently.

The electricity tariffs are reviewed on a quarterly basis. SP Services says for the period July 1 to September 30, they are pegged to a higher fuel oil price of $87.49 per barrel, compared to $81.23 for the previous quarter. Fuel oil prices have been escalating especially in recent years, pushing electricity tariffs to the highest to date.

- Actually, I'm not quite sure why SP Services is pegging electricity prices to fuel oil prices, when 80% of Singapore's electricity is generated from natural gas.

- Also, check out the chart in the PDF below. Observe that the electricity rate was 15.80 c/KWh about a couple of years ago (Apr/Jul 2004), and it is now going to be 21.15 c/KWh. That's an increase of 33.86%. Has *your* salary gone up by 33%? How's that for inflation, eh?

Oil above $72 on healthy US gasoline demand

news.yahoo.com :

Oil rose above $72 on on expectations of a fall in U.S. gasoline supplies for the first time in more than two months as American drivers continue to fill up despite high pump prices. Oil has traded between $69 and $72 for more than a month as the market balances geopolitical tensions and rising global demand with inflation fears and brimming U.S. fuel stocks.

U.S. weekly inventory data was also expected to show an 800,000-barrel drop in domestic crude supplies due to the closure of a key shipping channel which connects the refining hub of Lake Charles, Louisiana with the Gulf of Mexico, while the clean-up of an oil spill continues. Three oil refineries and a liquefied natural gas terminal in Lake Charles remain cut off to shipping traffic, forcing the refineries to slow fuel production.

Adjusted for inflation, oil is at its most expensive since 1980, the year after the Iranian revolution, and is holding near its record $75.35 hit in April after a rally that has taken prices up from $20 at the start of 2002.

(2006-06-28 12:49:12 SGT) [Energy] Permalink

Rising salaries threaten Indian outsourcing industry

gulf-times.com :

Soaring salaries and poor quality of manpower are prompting foreign firms to shut their outsourcing operations in India. US-based Apple Computer and software maker Pervasive have been joined by Powergen, a British subsidiary of German energy supplier EON, in announcing the closure of their centres in India's technology hub of Bangalore.

The National Association for Software and Service Companies (Nasscom), India's premier software body, said salaries of freshers had shot up between 11% and 15% in the past few years while wages for senior managerial positions had risen by a whopping 30%. Analysts said labour arbitrage for India existed only at the entry-level where engineers earned about $9,000 a year – about 1/7 of the wages being paid to their counterparts in the United States.

Other than steep salaries the quality of manpower is also proving to be a challenge for technology firms. According to Nasscom more than 3 million graduates pass out of colleges every year and India produces 400,000 engineers annually but "of this only a very small percentage is employable".

Sunil Mehta, vice president of Nasscom, said despite the hurdles India still dominated the outsourcing industry and domestic and multinational companies operating in the country were turning profits. "Those companies which employ fewer people and do not take advantage of economies of scale are the ones that are facing problems," Mehta said.

Anadarko to buy Kerr-McGee, Western Gas for $21 billion

news.yahoo.com :

U.S. oil and gas producer Anadarko Petroleum said it agreed to buy smaller rivals Kerr-McGee and Western Gas Resources for more than $21 billion in cash to expand in the U.S. Gulf of Mexico and Rocky Mountains regions. The deals are the latest blockbuster acquisitions in the red-hot energy sector. Mid-tier companies that focus on oil exploration and production, in particular, have become attractive takeover targets as oil prices hover around $70 a barrel.

The Woodlands, Texas-based company will acquire Kerr-McGee for $16.4 billion, or $70.50 a share - a 40% premium to Kerr-McGee's stock price. Anadarko's separate deal to acquire Western Gas for $4.7 billion, or $61 a share, is even richer, offering a 49% premium.

The transactions boost Anadarko's position among the biggest North American independent oil and gas producers, though the company remains much smaller than top U.S. oil producers like Exxon Mobil and Chevron. Analysts said the deal appeared expensive, but the assets acquired seemed to complement Anadarko's existing portfolio and would allow it to become a U.S. natural gas powerhouse.

(2006-06-28 12:34:52 SGT) [Energy] Permalink

Iran to ration petrol

channelnewsasia.com :

Iran has said it will stop importing petrol in September and begin rationing it, ironic for a country that is OPEC's number-two exporter of crude oil. Iran's refineries have a capacity of 40 million litres of petrol a day, but demand is close to 70 million litres. Petrol is extremely cheap in Iran thanks to massive subsidies. A litre of regular petrol costs just 800 rials (9 US cents, or 34 cents a gallon).

A surge in car ownership and petrol smuggling to Iran's neighbours, where prices are far higher, has caused an explosion in demand. A government initiative aims to put the brakes on domestic petrol consumption by limiting access to subsidised fuel. It stipulated that car owners would be provided with "smart cards" that allow petrol purchases at subsidised rates up to a fixed ceiling, above which motorists would have to pay the full price.

Despite Iran's huge oil and gas reserves, President Mahmoud Ahmadinejad has stressed the importance of exploring alternative energy sources. "Proper management of resources, turning to substitute fuels ... and allocating objective-oriented subsidies in the energy sector are among ways to make optimum use of the country's energy reserves," he told MPs.

(2006-06-28 12:26:04 SGT) [Energy] Permalink

China and Saudi Arabia: interesting SPR team up?

peakoil.com -> marketwatch.com :

China and Saudi Arabia are reportedly discussing an agreement to import oil from Saudi Arabia to fill China's strategic oil reserves. The goal is to have about 800 million barrels in the reserve, said Phil Flynn, a senior analyst at Alaron Trading, who cited comments from China's Finance Minister Jin Renqing last year. That would be larger than the strategic petroleum reserve in the United States, the biggest stockpile of government-owned emergency crude, which can hold as much as 727 million barrels.

Filling it may cause a climb in oil prices because it'll draw from market inventories. At the same time, it could prompt a price decline since a reserve would also offer a cushion in case of supply disruptions. Either way, it may take time for an SPR in China to influence prices, given that the first of the oil reserve facilities isn't expected to start operation until at least the end of this year.