Expect higher electricity prices despite Singapore’s energy security: Tan See Leng

[SINGAPORE] The Singapore government has “multiple lines of defence” to safeguard the country’s energy security amid the Middle East conflict, said Minister-in-charge of Energy and Science and Technology Tan See Leng on Thursday (Mar 12).

But with rising global gas prices, Singapore households need to expect electricity prices to go up in the coming months, he wrote in a Facebook post.

“Many of you would have read reports of oil and gas prices rising due to the conflict in the Middle East. The Middle East is a major fuel-producing region that ships 25 per cent of seaborne oil and 19 per cent of global liquefied natural gas (LNG) trade through the Strait of Hormuz,” noted Dr Tan.

“The closure of the Strait of Hormuz due to the conflict will affect global imports of crude oil and LNG from the Middle East, and likely result in higher global fuel prices in the near term.”

He added that as the global environment is becoming less certain and stable, fuel disruptions and price fluctuations will become more frequent. The effects of these will be felt in Singapore, which imports all of the natural gas needed to fuel about 95 per cent of its electricity generation, he said.

“While these measures are in place to ensure Singapore has enough energy for our needs, global gas prices are indeed rising due to the conflict,” said the minister.

“We must therefore expect electricity prices to increase in the coming months. 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.”

Oil prices rose nearly 9 per cent on Thursday. Brent futures extended gains to climb 8.8 per cent to US$100.03 at 1425 GMT, while US West Texas Intermediate crude gained 9.2 per cent to US$95.25.

Measures in place

On the measures the Singapore government has in place to handle the rise in global gas prices, Dr Tan highlighted that around half of the city-state’s gas is piped to Singapore from the region and is therefore “unaffected”.

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Moreover, the Republic diversifies its sources of imported LNG, and hence is “not overly exposed to the Middle East”, he noted.

“Our LNG importers have a global portfolio of sources, such as the US and Australia, which they can tap to replace cargoes originally from the Middle East. For the one LNG cargo from the Middle East, efforts are underway with the importers to find replacement cargoes,” said Dr Tan, who is also the minister for manpower.

He noted that Singapore has established a fuel stockpile – a mixture of gas and diesel – which power-generation companies may draw from in the event of a severe disruption to gas supplies.

Noting that the Energy Market Authority requires Singapore’s electricity-generating turbines to be able to run on both gas and diesel, he pointed out that the authority regularly tests all power plants to ensure that they are able to switch to diesel-based generation if that is needed.

Support for households, businesses

The minister said that the government “stands ready to support households and businesses as necessary”. Eligible Housing & Development Board households are set to get 1.5 times the regular amount of U-Save rebates, or up to S$570 in the financial year, as was announced at Budget 2026 in February, he noted.

“As the situation in the Middle East is evolving, we are watching closely, especially for secondary effects of disruption. 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,” Dr Tan said.