SINGAPORE: Singaporeans are lamenting the squeeze of rising costs after the Energy Market Authority (EMA) indicated most households should brace for a significant increase in electricity costs from July.
The EMA warned that the regulated electricity tariff is likely to rise sharply in the third quarter amid higher global fuel prices triggered by the Iran conflict.
The regulated tariff, which currently stands at 29.72 cents per kilowatt-hour (kWh), including GST, is reviewed every quarter and remains the pricing mechanism used by 62.8% of households.
The current tariff, which applies from April to June, was already 2.1% higher than in the first quarter of the year. EMA has also warned of further and potentially sharper increases in electricity and town gas tariffs later in 2026.
Analysts speaking to the Straits Times have offered varying forecasts on how much the tariff could increase, with estimates ranging from a mid-single-digit rise to as much as 30%. The higher projections stem from elevated energy costs caused by disruptions linked to the conflict involving Iran.
Amanda Kang, principal analyst for Southeast Asia gas research at S&P Global Energy, expects the tariff to increase by between 20% and 25%. Based on current consumption patterns, she said such an increase could add around $30 to the monthly electricity bill of a typical four-room HDB flat.
SP Group estimates that the average monthly electricity bill for a four-room flat is currently close to $88.
Not all analysts expect a dramatic increase, with some projecting only a mid-range single-digit increase in the regulated tariff. Kang said the expected rise in electricity costs ultimately comes down to fuel prices, which have increased steadily over recent months.
“Singapore’s electricity prices are tied to imported gas costs, which lag oil prices under long-term supply contracts. When oil prices spike, electricity tariffs follow — but with a lag,” she said.
While the Government’s U-Save rebates are expected to soften the blow for some households, quite of number of Singaporeans have expressed concerns online as they grapple with the ever-rising cost of living.
“Cooked. $30 increase for households that pay around $88,” one netizen remarked online, with others expressing shock at the massive potential hike households may have to brace for.
Others argued that with signs of easing tensions in the Middle East, the Government should consider stepping in to cushion the impact on consumers.
One commenter wrote, “If the war is still ongoing, then totally understandable, but now we are starting to see light at the end of the tunnel, shouldn’t the government, for once, just absorb the cost to give the people some good faith that normal times are coming back soon?”
Another netizen echoed a similar sentiment, asking: “Should the government consider sucking up the difference to control inflation???? Instead of letting another post-COVID level inflation hit the population and using vouchers to offset.”
Several commenters also pointed to the recent decline in crude oil prices, questioning whether a sharp tariff increase was justified.
“Didn’t oil prices just go down? USD 70 now?” one commenter asked while another wrote, “Oil price before Iran war: $73. Oil price currently: $76. But electricity tariffs go up 30%. Okay boss.. Must be Iran, right?”
Some younger Singaporeans voiced worries about the cumulative effect of rising costs on their ability to save.
“30% increase is actually insane. I’m just an intern earning like $800 a month, and I can already feel every single price hike. Hawker food going up, transport going up, now electricity,” a netizen lamented, “It’s like everything is conspiring to make sure young people can never save anything.”
They added, “The U-Save vouchers help a bit, but it’s not really addressing the root cause. Just feels like we’re always playing catch-up.”
Others wondered whether consumers could eventually benefit if energy prices continue to ease.
“So now that oil has dropped to 70-ish per barrel, does this mean Oct or Nov the electricity tariff will drop 30%? I mean, the prices are a response to the previous quarter’s soaring oil prices, right?” one commenter asked.
Energy costs account for the largest component of Singapore’s electricity tariff. The tariff for each quarter is determined using average fuel costs from the first two-and-a-half months of the previous quarter, meaning the upcoming revision will largely reflect fuel prices recorded between April and mid-June.
Global energy markets have experienced significant volatility following military action by the United States and Israel against Iran on Feb 28. Strikes on energy infrastructure in the Gulf region and the effective closure of the Strait of Hormuz pushed energy prices higher.
In a statement on June 17, an EMA spokesperson said the conflict in the Middle East had strained global fuel supply chains, resulting in a sharp increase in natural gas prices since the end of February.
“As a result, the regulated electricity tariff is expected to rise significantly in the coming quarter,” the spokesperson said.
Singapore remains particularly vulnerable to fluctuations in global energy markets due to its reliance on imported fuel. Natural gas accounts for about 95% of the country’s electricity generation.
In 2025, 43% of Singapore’s gas imports came through pipelines from Malaysia and Indonesia, while the remaining 57% consisted of liquefied natural gas imported from various countries, including suppliers in the Middle East.
Although US President Donald Trump has said that an agreement between Washington and Tehran would result in the Strait of Hormuz being “completely open” by June 19, analysts caution that returning shipping traffic to normal levels may take time and remain dependent on regional stability.
Some observers say electricity tariffs could begin declining from the final quarter of 2026 if the Iran peace agreement leads to a sustained recovery in oil and gas flows.
