He was commenting on the finance ministry’s announcement yesterday that the 8% service tax on electricity bills, an increase from the previous 6%, would only be applicable for usage above 600kWh.

Treated water supply, on the other hand, is exempted from the new rate.

“Water and electricity are both essential needs.

“This is why I’ve asserted that the primary drivers for all price hikes is related to water and electricity,” Wee told a press conference at Parliament.

He said water tariffs had already gone up from Feb 1.

Wee said the SST hike for electricity could indirectly impact the lower-income group.

He said any hike in SST rates must be avoided as the lower-income group will feel the repercussions.

Businesses will face additional challenges with the 2% SST hike and may increase prices for goods to retain their profit margins, he added.

Wee said it was inevitable that any rise in production costs would ultimately be passed on to consumers.