Recent adjustments to water and carpark prices may contribute to a “temporary increase” in inflation, but any impact is expected to be “small”, said Minister of State for Trade and Industry Koh Poh Koon.
Dr Koh said the various price adjustments will contribute around 0.2 percentage points to inflation this year. The Monetary Authority of Singapore (MAS) has projected prices to be higher this year than they were last year, with the consumer price index (CPI) to come in at 0.5 to 1.5 per cent.
Dr Koh said the main driver of the increase in prices this year is the expected increase in the price of electricity and “other energy-related components” such as petrol. This, he said, comes against a backdrop of increases in global oil prices.
Dr Koh was asked by MP for Chua Chu Kang GRC Zaqy Mohamad if the increase in water, electricity, transport and carpark prices would impact inflation and to what extent. Mr Zaqy said his residents have voiced concern on the “slew of government announcements” of such increases.
“Does the Ministry proactively monitor this and coordinate with agencies so that we can smoothen the impact in anticipation of some of these potential increases that we know … for example the energy prices you mentioned? Could we have smoothened some of these increases as well to make it more affordable for citizens?” Mr Zaqy asked.
Dr Koh said the Government takes price increases seriously and wherever possible, will smooth out increases although he said it is difficult as oil and gas prices are not within the Government’s control. These will have to be adjusted when prices fluctuate.
But he said for households receiving the GST Utilities-Save (U-Save) vouchers, the impact of inflation will be much less. That is because rebates are not included in the calculation of CPI.