Singapore's Wholesale Electricity Prices Soar to Record High Amid Middle East Conflict

The recent surge in wholesale electricity prices in Singapore is causing concern that household bills may soon follow. The Uniform Singapore Energy Price (USEP), a measure of the wholesale cost of electricity, hit $486.21 per megawatt-hour (MWh) in the week of Sept 13 to 19, the highest level so far in 2026. This increase is largely due to the Middle East conflict, which has disrupted natural gas production and led to higher fuel costs.

Natural gas accounts for about 95 per cent of Singapore's electricity generation, making it vulnerable to price fluctuations. The Energy Market Authority (EMA) has warned that households buying electricity at wholesale rates may end up paying more than those on regulated tariff or fixed-price retail contracts.

For households on the regulated tariff, the USEP does not directly impact their bills. However, fuel cost fluctuations do affect the tariff rate, which is set quarterly by national grid operator SP Group. The current mechanism gives a heavy weight to fuel prices, which anchor closely to the USEP. The Singapore Government has warned that supply disruptions due to the Middle East conflict will lead to higher costs for power generation.

David Broadstock, partner at energy consultancy The Lantau Group, said: “The current mechanism (to calculate the tariff rate) gives a heavy weight to fuel prices, which, under a predominantly natural gas system, anchor quite closely to USEP.” He added that a downward revision of the regulated tariff may be possible due to relative stability in the Iran-US conflict.