Asia Singapore Eating outlets are closing and profits fully wiped as electricity bills rise...

Eating outlets are closing and profits fully wiped as electricity bills rise astronomically

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One restaurant closed after their electricity bill shot up from $800 per month to $4,000.

Channel NewsAsia (CNA) reported six days ago that the December electricity bill of a Jinjja Chicken outlet in Bugis Village had gone up by five times from the bill they received in October. The Korean fast food chain’s managing director told CNA, “When I saw the bill, I got a shock! It’s ridiculous.”

Jinjja Chicken’s other outlets have seen milder bill increases, as they remain on contracts with other electricity retailers.

For the wholesale electricity market, there has been a reduction in available power supplies compared to last year which, combined with higher gas prices, has led to an increase in the wholesale price of electricity. An increase in network and policy costs is also pushing prices up. The war between Russia and Ukraine is also putting upward pressures on prices.

The turn in market conditions saw six electricity retailers calling it quits between October and December last year, while two others terminated some customers’ contracts prematurely. This resulted in around 11,000 business consumers having to buy electricity directly from the wholesale market, therefore being more exposed to volatile prices.

The Restaurant Association of Singapore (RAS) said its recent poll of nearly 600 F&B business operators found that increases in electricity bills have ranged from about 40 per cent to a whopping 472 per cent. “Many of the respondents were the ones who were caught in the situation where their account was switched back to SP after their previous electricity retailer left the market,” an RAS spokesperson said.

One F&B outlet which was hit by the rising electricity prices and eventually closed is Food in the Woods by Mother Earth 大地之素. Food in the Woods, established in 2019, served a wide variety of dishes from western selections of pizza, burger sets, and beyond meat as well as Asian ones like yong tau fu, bento sets, noodles with minced omnipork, fried bee hoon, mee goreng, olive and minced omnipork fried rice. It closed its doors on 15 February.

Food in the Woods said in a Facebook post on February 13 that “rising costs now in electrical, rental, logistics and supplies, and soon GST will make things even harder and unbearable. For example, the electricity bill used to be $800. Now it is $4,000.”

Food in the Wood’s post made on February 13 is no longer viewable on their Facebook page, but a screenshot of their post is being circulated widely in social media platforms. Patrons of the eating outlet expressed that they were sad that the restaurant was closing. Many said that it is difficult to find an air-conditioned vegetarian restaurant which offered a wide variety of food.

Singapore’s power market has been affected by multiple stresses over recent weeks. These include a global energy crunch, which sent global fuel prices spiralling upwards, and disruption to the piped natural gas supply.

Most consumers are on regulated tariffs or continue to be on retail contracts, and have not been affected. However, some have been hit by volatility in the Singapore Wholesale Electricity Market (SWEM).

Economic uncertainty triggered by a renewed round of lockdowns in response to the Omicron variant and the war between Russia and Ukraine could keep prices elevated for the next few months.

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