May 25, 2026

When oil prices rise, the first signs may not always appear at the petrol station. They may show up in a school bus fee, a ferry surcharge, a grocery bill, a courier charge, or the cost of a home renovation. For Singapore, where much of daily life depends on imported energy, distant geopolitical conflict can quickly become a household concern. In “Singapore’s hidden bill: From the Middle East oil shock to your wallet” (The Straits Times, May 2026), Associate Professor Alberto Salvo (NUS Economics) examines how the Iran conflict’s oil shock reveals Singapore’s deep dependence on fossil fuels.

Salvo argues that oil disruptions are often discussed in broad economic terms, such as inflation, prices, and GDP. However, their effects are felt much more directly by households and businesses. As fuel costs rise, supermarkets adjust deliveries, service providers introduce or increase transport surcharges, school bus operators renegotiate routes and fees, and short-haul travel becomes more expensive or less available. Lower-income and shift-worker households are especially vulnerable, as they tend to spend a larger share of their income on energy-intensive essentials, including food.

Salvo traces how oil and gas shocks ripple through Singapore’s fossil fuel-wired economy. Higher fuel prices affect farming, shipping, warehousing, food manufacturing, packaging, online shopping, construction, utilities, and hawker operations. In other words, fossil fuels shape not only how people move, but also how they eat, shop, cool their homes, and access everyday services. While targeted government relief can help cushion lower-income households and small businesses, Salvo cautions against broad fuel subsidies, which may weaken incentives to use energy more efficiently. Instead, he points to the need for a longer-term shift away from centralised fossil fuel dependence towards cleaner, more decentralised, and regionally integrated energy systems.

A major part of this transition, Salvo suggests, lies in regional cooperation. The ASEAN Power Grid, which aims to connect electricity networks across Southeast Asia, could help Singapore and its neighbours build greater resilience against global energy shocks. Renewable power generation, solar-plus-storage systems, hydrogen produced through clean energy, and cross-border electricity trade all offer ways to reduce exposure to distant geopolitical disruptions.

Salvo also highlights the importance of staying the course on Singapore’s carbon tax trajectory, green investment, clean transport, and sustainability-focused workforce development. Electric vehicles and electrified ferry services, for instance, may not solve the problem overnight, but they become cleaner over time as the power grid itself shifts towards renewable energy.

Overall, the opinion piece frames the move away from fossil fuels not simply as an environmental ambition, but as a practical strategy for national resilience. For Singapore, clean energy is about cost-of-living protection, economic competitiveness, and reducing vulnerability to recurring global fuel shocks.

Read the article here.