Can retailers sell cheaper that producers of electricity?

How can electricity retailers offer cheaper electricity than SP Group?

Retailers in the Open Electricity Market are either the retail arm of power generators or independent retailers which buy electricity in bulk from power generation companies in a wholesale market where prices change every 30 minutes depending on demand and supply....

Retailers are also able to customise price plans, including the bundling of other services or products, and can impose contract lock-in periods or early termination charges....

As with energy markets overseas, several retailers are likely to be successful in the long run, said Professor Subodh Mhaisalkar, executive director of the Energy Research Institute at Singapore's Nanyang Technological University.

Companies have to innovate and offer differentiated services in order to adapt as the market evolves, he added...

The prices offered by retailers will change as the underlying cost of energy changes.

“While price may seem the most important factor for now, consumers must understand that lower prices today are not a given in the long term regardless of whether you stay on the current scheme or change to a new retailer,” said Geneco’s Mr Low.

Read more at https://www.channelnewsasia.com/news/singapore/how-do-electricity-retailers-charge-lower-prices-than-sp-group-11208792

The above extracts from Channel News Asia were used as explanation for the recent intiatitves to have more alternative retailers selling 'cheaper' power to the users. One simple question, if the retailers can sell cheaper without the production processes and cost, why can't the producers of electricity sell at the same price as the retailers or even cheaper? The retailers now have excess cost in marketing and sales that needs to be paid and can sell cheaper? This is an economic miracle. The added manpower must be added cost, cannot be free, must come from somewhere. And the retailers are not charity organisations, they can sell cheaper and make a profit?

Another strange thing from the discussion is the cost of natural gas that was used to produce the energy and the computation of the selling price that included oil prices that were not part of the production cost. Slimy isn't it? Read this,

'The energy cost, or cost of imported natural gas, is tied to oil prices by commercial contracts, which change depending on global market conditions. It is based on the average price of oil and the average SGD/USD exchange rate in the previous quarter.'

Read more at https://www.channelnewsasia.com/news/singapore/how-do-electricity-retailers-charge-lower-prices-than-sp-group-11208792

And here is another report made in different circumstances, the failure of Hyflux in its entry into energy production to highlight how much the price of gas has fallen, meaning lower production cost, but not much of this benefit was transferred to the retail users.

'Due to oversupply of gas in the market, the projected reserve margin for electricity demand in Singapore increased to 70 per cent in 2017 from 30 per cent in 2011, it said. The reserve margin measures the excess capacity at peak electricity demand.

This resulted in the fall of the wholesale electricity price.

"The average wholesale electricity price has dropped from about SGD220 per MWh in 2011 when the Tuaspring project was awarded to an average of SGD81 per MWh in 2017, resulting in significant losses from electricity generation," the letter said.'

Read more at https://www.channelnewsasia.com/news/business/olivia-lum-deeply-saddened-investors-sias-dividends-salary-11247804

If we put all these facts together, it means that the producer of energy has gained a lot of savings from lower gas prices and they could sell energy to the people at a very cheaper price than it is. There is no need to have more retailers, with more marketing and sales costs, to sell energy cheaper to the consumers. Right?

What do you think is the scheme of things?

'An elderly woman who lived near me met me at the bus stop.
She said – Mr. Tan, I agree with what you wrote about the retail electricity supply. As an elderly person, I do not know what to do choose my electricity supplier. Why don’t the government just get Singapore Power to reduce the electricity price, instead of asking us to look for our supplier. I find life to be very complicated....

I also read that some electricity suppliers are exiting the market, because it is too costly and too wasteful to be marketing the supply.

What a wasteful practice. What an incompetent government.'
Tan Kin Lian