Petrol prices expected to increase due to Russia-Ukraine war; here's what it means for you

As global energy costs rise because of the Russo-Ukrainian conflict, Singaporeans need to prepare themselves for higher petrol and electricity prices as well.

Energy costs worldwide were already on the rise over the past six months due to reopening economies and environmental crises, but the current Russo-Ukrainian conflict has further hiked prices up.

Russia is one of the largest oil exporters in the world, and it also contains large natural gas reserves that provide their export supplies. With the geopolitical instability in Ukraine and the increasing sanctions imposed upon Russia amidst the Russo-Ukrainian conflict further constricting global supplies, petrol and electricity prices in Singapore are expected to continue rising.

Most of the oil companies in Singapore have already raised their prices, with electricity costs for both households and businesses also expected to grow within the upcoming months, so would we see a sudden spike in monthly utility bills?

Well, you don’t have to worry just yet. Despite surging prices that might cause financial stress, there are still several ways for you to tighten your budget and manage these changes.

Here are some of the key things you need to know about petrol and electricity expenses in Singapore, and how you can save on them:

How can you save on petrol?

Petrol prices in Singapore have been on the rise over the past year due to an unfortunate mix of factors such as a global supply crunch and poor economic conditions due to the Covid-19 pandemic. In fact, most taxi services have already announced an increase in fares starting from March 2022 due to surging fuel costs.

This upward trend in prices, unfortunately, is expected to worsen as the Russo-Ukrainian war continues.

Current Fuel Prices in Singapore 2022

This is a stressful change for all because it affects almost everyone’s budget as long as you either own a vehicle or use cab-hailing services.

The good news is that there are several tips and tricks that you can use to cut back on your fuel spending to better navigate this price hike.

Best petrol credit cards

Credit cards which specialise in providing petrol discounts are a great way to minimise your spending. These cards provide you with exclusive petrol discounts and high cashback rates that can be a huge relief for your wallet.

Here are some of the best petrol credit cards in the market:

UOB One

Apply Now Apply Now Consider this if you want high savings at SPC and Shell. Read Review

• Pros
  • Good fit for budgets of at least S$2,000 per month
  • Easy cashback on daily spend
  • Gives rebates for paying bills

• Cons
  • Doesn't fit high budgets or low/inconsistent budgets
  • Annual fee

OCBC 365

Consider this if you want high savings at Caltex and Esso. Read Review

• Pros
  • 6per cent rebate on dining, 3per cent on groceries, transport, recurring bills, online travel
  • Fee waiver with S$10,000 annual spend
  • Up to 22.1per cent fuel savings at Caltex, 20.2per cent at Esso

• Cons
  • 0.3per cent rebate on general spend
  • High S$800 minimum spend requirement

Citi Cashback

PROMO: Receive Nintendo Switch (worth S$499) or Samsung Galaxy A8 (worth S$448) or S$350 cash via PayNow with a min. spend of S$500

Apply Now Apply Now Consider this if you want high savings at Esso and Shell. Read Review

• Pros
  • Great dining and groceries rewards
  • High petrol discounts

• Cons
  • Lacks shopping and entertainment rewards
  • Not suitable for lower budgets

HSBC Visa Platinum

Apply Now Apply Now Consider this if you want high savings at Caltex and Shell. Read Review

• Pros
  • Great local dining & groceries rewards
  • Suitable for moderate budgets (S$1,600+/month)
  • Cashback & miles rewards

• Cons
  • Limited miles & travel perks
  • Not suitable for frequent online shoppers

ALSO READ: Latest petrol prices in Singapore and all the petrol credit card discounts

Other tips and tricks

Fortunately, credit card discounts are not the only way to save money.

Here are some everyday tips and tricks that you can use to make sure that you don’t spend a single unnecessary cent on fuel:

1. Good maintenance of your vehicle

A well-maintained vehicle consumes less fuel, and there are a few ways that you can make sure your vehicle is in tiptop condition.

• Keep your tires pumped: Underinflated tires tend to use more fuel because of higher resistance on the road.
• Service your engine: A well-tuned and regularly maintained engine will consume less fuel.
• Clean your air filters: If your air filters are clogged, they can increase fuel consumption by up to 10per cent.

2. Develop good driving practices

How you use your vehicle everyday also matters. The following tips will help you minimise your fuel consumption:

• No idle engine use: Make sure that your engine is never unnecessarily switched on when you’re not using it.
• Combine your trips: Whenever possible, merge your smaller trips into one bigger trip.
• Stick to the speed limit: Not only is driving at an appropriate speed safer, but it is also better for your wallet. Fuel consumption increases sharply both when you’re driving too fast or too slow, so make sure you’re at the perfect speed to minimise your fuel consumption.
• Travel light: Remove any unnecessary weight from your vehicle – it can go a long way in lowering your fuel usage.

Best electricity plans

Just like petrol prices, the cost of electricity in Singapore has also been steadily rising over the past year. Household electricity tariffs have risen by an average of 5.6per cent since the start of the year–the fourth consecutive quarter to see such an increase.

These costs are sure to continue rising during the Russo-Ukrainian war as global fuel costs surge. What can you do to better manage this spike in cost?

Choose the right electricity plan

Since the Open Electricity Market (OEM) initiative was launched in Singapore back in 2018, Singaporeans have had the option to opt out of Singapore Power and get their electricity from one of the alternate electricity retailers instead.

OEM retailers tend to offer plans that have a slightly cheaper tariff rate as compared to Singapore Power. With electricity prices projected to climb in the upcoming months, switching to OEM might be a smart move to cut back on costs.

Generally, electricity plans from OEM retailers fall into either one of these two categories: fixed price plans, or discount off the regulated tariff plans.

Fixed price plans

As suggested by its name, fixed price plans offer a reliable, fixed price that you need to pay monthly over the term of your contract which is usually between 6 to 24 months. This is a reassuring option if you want a stable electricity bill that won’t expose you to the current volatility in the energy market.

Of course, the draw back of such plans is, if the electricity tariff were to decrease for some reason, you'll be stuck paying electricity bills that are slightly pricier, than if you were to be tied to a discounted regulated tariff plan.

Regulated tariff plans

Discount off the regulated tariff plans, on the other hand, offer discounts based on the regulated tariff prices. As of March 2022, the electricity tariff is 27.22 cents per kWh.

While these plans ensure that customers always pay less than if they had opted for a Singapore Power subscription, they are dependent on the regulated tariff rates, which are subject to change every quarter.

Which should you go for?

Wondering which OEM plan will offer you the best prices? Here is a summary of the best plans in the market right now.

6-month plan	12-month plan	24-month plan	No contract
Geneco	26.80¢/kWh	26.80¢/kWh	26.80¢/kWh	N.A.
Sembcorp Power	27.10¢/kWh	27.10¢/kWh OR 28.10¢/kWh (green plan)	N.A.	27.22¢/kWh
PacificLight	N.A.	27.11¢/kWh	27.11¢/kWh	28.60¢/kWh (+ 50¢ daily charge)

1. Geneco

Geneco has the cheapest rates in town for their fixed rate plans – which cover either six months, 12 months, or 24 months – at only 26.80 cents per kWh. They even offer bill rebates and FairPrice vouchers for applicants who opt for their 24-month plan, which can dramatically lower your monthly electric bill.

2. Sembcorp Power

Sembcorp Power’s fixed rate plans are another option that offers affordable rates at only 27.10 cents per kWh. With exclusive monthly rebates worth up to S$60 available for select bank members, Sembcorp Power’s plans are worth considering if you are from the participating banks.

3. PacificLight

At only 27.11 cents per kWh, PacificLight is right behind the former two retailers in terms of affordability. Their deposit waiver for participating banks’ cardholders and exclusive rebates make them an attractive option.

If you’re looking for more information about the OEM plans in the market, you can check out this article.

If you want a discounted tariff rate rather than a fixed-price plan instead, Senoko’s 12-month LifeSave12 is the best option in the market. The plan offers a 6 per cent discount off the quarterly regulated tariff, which is the highest amongst similar retailers.

Price hikes on things like petrol and electricity can be extra stressful, especially when it happens amidst a pandemic that has already complicated our lives. Fortunately, there are still many ways for you to lower your spending without sacrificing your quality of life, one of which includes looking for the best financial products that suit your needs.

Looking for a suitable credit card for yourself that matches all your needs? You can read our carefully-curated credit card guides here.

This article was first published in ValueChampion.