SINGAPORE: The impact of the Iran war has so far been relatively contained in Singapore, with no emergency measures or work-from-home orders, unlike in many countries around the world.
The Government has yet to dip into its energy stockpiles of liquified natural gas and diesel, which are enough to last for months, although it has warned of a “bumpier ride ahead”.
But the conflict, which has driven up energy costs, has seeped into daily life here, prompting the authorities to take action to ease the burden.
Prime Minister Lawrence Wong on Thursday (April 2) said some support measures announced at the Budget will be brought forward, to provide earlier relief and cushion the Middle East conflict’s impact on Singapore households and businesses.
He said the Government will also provide targeted support to sectors hit hardest by the conflict and enhance existing measures.
More details will be provided when Parliament sits next week.
The support measures will come at a timely juncture, as higher prices begin to bite across the broader economy.
As school bus driver V. Parath put it: “The price of everything in Singapore is increasing.”
The impact is already being felt at the flick of a switch, with electricity tariffs, which most households pay, rising for the quarter starting April 1, and the authorities warning of sharper increases to come.
Cooking gas prices have also increased, although providers said they may absorb costs for hawker centres.
Take a taxi, and you will likely have to pay more than before, because temporary fare hikes by most operators have taken effect. Ride-hailing operators Grab, Gojek and Tada will also temporarily raise surcharges to defray their drivers’ fuel expenses later in April.
Petrol prices, which surged at major fuel stations following the war, have pulled back slightly. But prices remain around the highs seen during the 2022 Ukraine crisis.
However, the spike in the price of diesel, used heavily by sectors such as construction, transport and logistics, has yet to ease.
Diesel prices have jumped by as much as 66.5 per cent to a record US$4.43 per litre, before discounts, costing more than premium grades of petrol.
Businesses that refuel at smaller pumps at lower rates said prices there have increased by more than 100 per cent.
Air fares, too, have increased, as airlines globally struggle to cope with the sudden, sharp spike in the price of jet fuel.
Fuel supplies have been especially squeezed, as much of the heavier, high-sulphur crude oil used to produce jet fuel and diesel passes through the Strait of Hormuz, a key waterway that has effectively been closed by the war.
Prices are unlikely to ease any time soon, analysts said, with companies often having no alternatives.
While larger businesses may have the ability to absorb price increases, smaller operators are struggling and have, in some cases, started to pass on costs to consumers.
Parath used to spend $1,600 a month on diesel to fuel his 13-seater minibus, but now pays far more.
Unable to raise his charges as he caters to students, the 29-year-old has been working on the weekend to make up for the added expense.
“Whatever I earn is just nice to pay off everything. I have to pay salary to my bus attendant. I have to pay for my vehicle,” he said.
“A lot of my friends and colleagues have sold their vehicles as they can’t cope with what is happening.
“Even for me, I am considering it. I really hope our Government does something to help us with the diesel cost.”
Interior design and decor consultant Matthew Foo said he has lowered his fees to remain desirable to clients, as his contractor is now charging more.
“My recent chats with my contractor were about how diesel for his truck, which used to be at around $2 plus per litre, is now $4 plus,” the 57-year-old said.
Business owner Kenny Tan, 37, said temporarily reducing the excise duty on diesel, which powers most goods vehicles, could help to ease the pressure.
Tan, who operates The Good Husband Laundromats & Drycleaners and vending machines around Singapore, said his suppliers have raised delivery charges by 15 per cent to 20 per cent.
He is also facing higher costs elsewhere. The apple supplier for his juice machines has increased the price of each carton of fruit from $35 to $40.
Tan said: “The supplier would have gone to the farmer. The farmer uses tractors and machinery powered by diesel. That cost has now gone up for them.
“It dribbles down as apples are moved through the supply chain. When suppliers receive the items, they are already paying an increased cost, and they have no choice but to pass on the cost to me.”
He has increased the price of juice from $2.80 to $3 as a result.
One of his laundromats has also felt the increase in gas prices, while the other two outlets are due to face higher rates in the coming weeks.
Tan said he is “trying to use creative ways to tide through the volatile situation”.
He has installed devices on air-conditioning units to control them remotely, and turns the units off during non-peak and overnight hours.
“This helps me to keep the electricity usage as optimal as possible, and save the environment when no one is in my laundromats,” he said.
Still, he cannot help but worry about the days ahead, as his operational costs, such as rent and manpower, had already been increasing before the war.
Tan said: “As a business owner, every day is a gamble. Every day is a risk we are taking, because we are affected directly by the situation around the world.” - The Straits Times/ANN
