Middle East crisis may lead to higher electricity prices in Singapore: Minister Tan See Leng

The Second Minister for Trade and Industry urged households and businesses to do what they can to economise on energy use, to reduce the impact of the situation where possible.

Singapore households and businesses may see higher electricity prices in the coming months as global oil and gas prices rise amid the ongoing US-Iran war affecting the Middle East.

In a Facebook post, Dr Tan See Leng, Minister for Manpower and Second Minister for Trade and Industry acknowledged that the Middle East is a major fuel-producing region, with about 25% of seaborne oil and 19% of global liquefied natural gas (LNG) trade passing through the Strait of Hormuz. Any closure of the strait due to the US-Iran war would therefore affect global imports of crude oil and LNG from the Middle East and could push global fuel prices higher in the near term.

Minister Tan added that as the global environment becomes less certain and stable as fuel disruptions and price fluctuations are becoming more frequent.

These developments are significant for Singapore, which imports all the natural gas needed to generate electricity. Around 95% of the country’s electricity is powered by natural gas.

To safeguard Singapore’s energy security, Minister Tan highlighted several measures in place.

First, about half of Singapore’s natural gas supply is delivered via pipelines from the region and is not affected by the Middle East war.

Second, Singapore diversifies its LNG supply sources and is not overly exposed to the Middle East. LNG importers have a global portfolio of suppliers, including the United States and Australia, which can replace cargoes originally from the region. Minister Tan said that for one LNG cargo from the Middle East, efforts are underway with importers to find a replacement shipment.

Third, Singapore has established a fuel stockpile consisting of gas and diesel. Power generation companies can draw from this stockpile if there is a severe disruption to gas supplies.

Fourth, the Energy Market Authority (EMA) requires electricity-generating turbines in Singapore to run on both gas and diesel. Power plants are also regularly tested to ensure they can switch to diesel generation if necessary.

While these measures are in place to ensure sufficient energy supply, Minister Tan said global gas prices are already rising. As a result, electricity prices in Singapore are expected to increase in the coming months.

He added that households and businesses can help offset the impact by conserving electricity and adopting more energy-efficient appliances.

To this point, he also reiterated that under Budget 2026, eligible HDB households will receive 1.5 times the regular amount of U-Save rebates, amounting to up to S$570 in the financial year.

Minister Tan concluded by saying Singapore is monitoring the evolving situation in the Middle East closely, particularly for any secondary effects arising from supply disruptions.

He added households and businesses should do what they can to economise on energy use, noting that everyone has a part to play.

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Lead image / SLNG on Minister Tan See Leng Facebook