Singapore to boost fuel reserves as conflict pushes prices up, electricity costs may spike if crisis drags on
Singapore is planning to increase its fuel reserves amid the ongoing Middle East conflict, which continues to disrupt global energy supplies.
Speaking in Parliament on Tuesday (7 April), Coordinating Minister for National Security K. Shanmugam said the move would be “costly but necessary”, as Singapore braces for prolonged uncertainty in global oil and gas markets, even after hostilities end.
Source: MDDI Singapore on YouTube
Prices expected to stay high even after conflict ends
Despite preparations, Mr Shanmugam cautioned that Singaporeans should not expect a quick return to pre-conflict prices.
Damage to critical infrastructure in the Middle East, including oil facilities, means that global supply capacity may take time to recover, even if the situation stabilises.
“Even if the Strait of Hormuz fully reopens tomorrow, global oil and gas export capacity will not return to pre-conflict levels quickly,” Mr Shanmugam explained.
In reference to electricity prices, he noted that “much sharper” increases can be expected should the conflict drag on.
Source: Earth Interior Design
Steps taken to reduce risk of disruption
Mr Shanmugam noted that the Middle East is not Singapore’s sole supplier of electricity.
He added: “We also import liquified natural gas from Australia, one of our key suppliers; the United States; and Mozambique.”
Singapore generates about 95% of its electricity from natural gas.
However, the nation’s power plants can switch from natural gas to diesel when required.
Source: AA website
No fuel rationing yet
For now, Singapore has not had to draw on its reserves or implement fuel rationing measures.
Mr Shanmugam said the country’s long-term strategy of diversifying energy sources has helped maintain stability despite ongoing disruptions. However, he warned that more severe supply shocks cannot be ruled out if the situation worsens.
“No one can say what the situation will look like, or will be like if there are more serious disruptions and they last longer,” he said.
Food supply disruptions possible, public urged to be flexible
Beyond electricity and fuel, the conflict could also affect food availability.
While Singapore maintains stockpiles of essential food items, Mr Shanmugam noted that supplies from certain countries may become unavailable.
Source: NTUC FairPrice on Facebook
“Singaporeans should be prepared for supplies of some foods from some countries to be unavailable, and will have to exercise flexibility in choosing alternatives,” he said.
The Government has been actively monitoring the situation through the Homefront Crisis Ministerial Committee, which is overseeing efforts to secure fuel supplies, strengthen supply chains, and support businesses and households.
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Featured image adapted from MDDI Singapore on YouTube and QTV Gambia on Facebook. Right image for illustrative purposes only.
