(March 31): Singapore is set to see higher electricity prices in the months ahead as the US-Israeli war against Iran tightens global energy supplies, authorities warned.
Fuel prices are “expected to remain elevated in the foreseeable future” given the extensive disruption to oil and natural gas production and shipping in the Middle East, Singapore’s Energy Market Authority (EMA) said in a statement on Tuesday.
The city-state, which depends on imported natural gas to generate the vast majority of its electricity, bought more than 40% of its liquefied natural gas from Qatar last year, according to ship-tracking data compiled by Bloomberg. Qatar is home to the world’s largest LNG plant, which was forced to shut down after being damaged in Iranian attacks earlier this month.
Singapore’s electricity rates are determined based on the average fuel costs in the preceding quarter, so prices in April through June will only be partially affected by the war, which broke out at the end of February, the EMA said. The following quarters could see “further and potentially sharper increases in the electricity and town gas tariffs”, it said.
“We cannot predict how long the conflict in the Middle East will last. Household and business consumers must therefore be prepared for higher and more volatile energy costs,” the EMA said, calling on consumers to use more energy-efficient appliances and conserve energy.
The supply shock stemming from the conflict has highlighted the vulnerability of nations that rely heavily on energy imports. Most of Qatar’s LNG goes to Asian buyers, and many other importers are scrambling for alternatives across the region. Taiwan spent over US$600 million ($773.96 million) more to secure spot cargoes as of June, while countries such as Japan and South Korea are weighing heavier reliance on coal.
See also: Japan to allow more coal-fired power to cope with energy shock
Uploaded by Chng Shear Lane
