Businesses, households can help offset impact of higher electricity prices: Tan See Leng
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Earlier in March, the Energy Market Authority warned that households could see an increase in electricity prices if fuel costs stay elevated.
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- Middle East conflict raising global gas prices, and likely to increase Singapore's electricity prices in coming months: Tan See Leng
- Singapore imports 95% of natural gas for electricity; around half is piped in from the region, but LNG from Middle East is vulnerable.
- Singapore has fuel stockpile and diversified LNG suppliers to mitigate disruptions.
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SINGAPORE - Although measures are in place to ensure that Singapore has enough energy to meet its needs, the conflict in the Middle East has driven up global gas prices, Minister-in-charge of Energy and Science & Technology Tan See Leng said in a Facebook post on March 12.
“We must therefore expect electricity prices to increase in the coming months,” he noted.
He added: “Households and businesses have a part to play because they can offset some of this impact by conserving electricity and adopting more energy-efficient appliances.
“The Government also stands ready to support households and businesses as necessary.”
Dr Tan pointed to measures announced at Budget 2026, with eligible HDB households to receive 1½ times the regular amount of U-Save rebates to offset utilities bills, or up to $570 in the financial year.
He noted that the Middle East is a major fuel-producing region that transports 25 per cent of seaborne oil and 19 per cent of liquefied natural gas (LNG) through the crucial Strait of Hormuz, which has been closed off with the Iran war.
This is likely to cause higher global fuel prices in the near term, he said.
A less certain and stable global environment also means that there are more frequent fluctuations in fuel prices and disruptions to supply.
Dr Tan said: “These effects are felt in Singapore, where we import all of our natural gas needed to fuel about 95 per cent of our electricity generation”.
Around half of the gas Singapore currently imports is piped in from countries in Asia, and this supply is unaffected, he noted.
Although Singapore imports from the Middle East, it is “not overly exposed” to the region as LNG importers have diversified their suppliers to include countries like the US and Australia, Dr Tan said.
He pointed out that importers can engage these suppliers “to replace cargoes originally from the Middle East”.
Singapore has also established a fuel stockpile comprising a mixture of gas and diesel, which power generation companies can tap if there is a severe disruption to gas supplies, Dr Tan said.
As required by regulation, electricity-generating turbines are able to run on both gas and diesel.
Dr Tan said the Energy Market Authority (EMA) tests power plants regularly to ensure that they are able to generate electricity from diesel if necessary.
The minister added that the Government is watching for secondary effects of a disruption to gas supply as the situation in the Middle East evolves.
He said: “This conflict is a reminder that we live in an unpredictable world, and we cannot take our energy security for granted.
“We must therefore do what we can to economise on our use of energy, and everybody has a part in this.”
Earlier in March, the EMA warned that households could see an increase in electricity prices if fuel costs stay elevated.
However, the regulator said most customers will be cushioned from immediate price volatility, as they are purchasing electricity either through a fixed-price retail contract, or the regulated tariff from retailers and SP Group.
The Straits Times understands that the minority of consumers who have chosen to buy electricity at wholesale prices will be more quickly affected by a change in rates.
