THE latest power rate hike has Miss Chua Kim Choo scratching her head.

On the one hand, the bank administrator read in the newspapers that electricity bills are up by 21 per cent from Wednesday. On the other hand, there are news reports saying that oil prices have fallen.

Miss Chua, who is in her 50s, pointed out that My Paper carried an report that quoted the Energy Market Authority (EMA) as saying that the projected fuel-oil price for the next three months will jump by 38 per cent, justifying the 21 per cent increase.

She said that in the same day's paper, there was another report saying that Taiwan Airlines will cut fuel surcharges on international routes to reflect oil prices.

The latest round of power hikes - the fourth this year - has left Miss Chua fuming.

"The 21 per cent increase is ridiculous. It's too high.

"How can it be justified when there are reports saying fuel prices have fallen?" she asked.

It is the highest one-time increase in about seven years, EMA said.

EMA chief executive Khoo Chin Hean explained that petrol and diesel pump prices, which have fallen in recent weeks, are not indicative of how much power generation companies have to pay.

Since 2004, electricity tariffs have been pegged to the price of fuel oil delivered to power generation firms for the next three months, otherwise known as "forward fuel oil" prices.

Mr Khoo was hopeful that if oil prices continued to drop, electricity tariffs could fall in the next quarterly revision, due in January.

When this reporter asked Miss Chua if she understands what forward fuel oil prices means, she replied: "I don't know what it means. I don't think the majority of us do."

This only adds to her confusion.

Miss Chua lives in a five-room HDB flat with her younger sister and her 20-year-old niece.

They pay power bills of more than $300 a month. With the latest increase, they can expect to pay another $63. Miss Chua said: "I've grown tired of analysing it, so I just pay."

She said she and her family have tried out ways to cut down on their power usage. They no longer leave their electrical appliances on standby and they have used energy-saving lightbulbs for the last three years.

But, she lamented, "no matter how much we save on usage, the electricity bills are always high".

Despite the Government's rebates, she feels that the lower-income will be the worst-hit, although she thinks middle-income earners are also increasingly being squeezed.

This article was first published in The New Paper on October 3, 2008.