etrol, electricity prices will rise as Ukraine crisis pushes up global energy costs: Gan Kim Yong

[waterdestiny]

Singapore should also be prepared for an impact on trade and investments, says the minister.

SINGAPORE: Pump prices for petrol and diesel, as well as the cost of electricity for households and businesses, will go up as a result of rising global energy costs due to the crisis in Ukraine, said Minister for Trade and Industry Gan Kim Yong on Monday (Feb 28).

"One key area we will be significantly impacted by the conflict in Ukraine is energy cost, as we import most of our energy needs," Mr Gan said in Parliament during the debate on Budget 2022.

“We have already seen in recent months a spike in the global prices of oil and natural gas, which Russia is a major exporter of,” he added.

The price of liquified natural gas (LNG) has doubled from six months ago, he noted, and the Brent Crude benchmark surged to US$100 per barrel a few days ago.

“Motorists must therefore expect pump prices for petrol and diesel here to rise in time. Electricity rates for both businesses and households will also increase in tandem with escalating global energy costs,” said Mr Gan.

“These will undoubtedly impact Singaporeans and further raise the cost of living here.”

The crisis will also further strain global supply chains as Russia and Ukraine are major exporters of commodities like wheat, as well as metals like nickel and palladium, said Mr Gan.

Supply disruptions will in turn raise the prices of goods that use these commodities, he added.

For example, disruption in the supply of nickel could affect the production of stainless steel, and disruptions to palladium supply will affect the semiconductor industry, said the Trade and Industry Minister.

“We must also be prepared for the follow-on impact on trade and investment flows. A protracted conflict will affect business confidence and weigh on global economies, and impact their recovery from the pandemic,” said Mr Gan.

The Government’s “initial assessment” is that the immediate and direct impact of the invasion of Ukraine on Singapore’s economy and businesses has been “manageable for now”, said Mr Gan.

Singapore companies have a “limited presence” in Ukraine, and it does not import many essential supplies from Ukraine and the region, he noted.

“Having said that, the conflict is still evolving, and the situation could change very quickly. Make no mistake that while Ukraine may seem far away from Singapore, the conflict there will have real and significant impact on all of us," he told the House.