Singapore has spent two years trying to grow its data centre sector without breaking its energy system. The Strait of Hormuz disruption has shown how exposed that system is to events thousands of kilometres away. On 30 June 2026, SP Group announced that the overall electricity tariff, including non-household customers, would rise by an average of 17.5 per cent, or 4.66 cents per kWh, for July to September compared with the previous quarter. The household tariff rose 17.0 per cent, or 4.64 cents per kWh, to a record high.
For a city where data centres account for about 7 per cent of electricity consumption, the increase is not an abstraction. It is a direct cost on one of the industries Singapore has chosen to keep growing.
A power system built on imported gas
Singapore generates about 95 per cent of its electricity from imported natural gas, according to the Energy Market Authority (EMA). In 2025, 43 per cent of its gas imports came by pipeline from Malaysia and Indonesia, and the remaining 57 per cent arrived as liquefied natural gas (LNG), The Business Times reported in March. About 42.5 per cent of Singapore's LNG imports in 2025 came from Qatar, according to figures from Rystad Energy cited by the paper.
That made Singapore one of the markets most directly affected when the war that began on 28 February closed the Strait of Hormuz. The International Energy Agency (IEA) says about 93 per cent of Qatar's LNG exports and 96 per cent of the UAE's transited the Strait in 2025, with no alternative route to market. Qatar's Ras Laffan plant, the world's largest LNG export facility, suffered significant damage and its operations have been suspended since March, The Straits Times reported in April.
The EMA said gas imports from Qatar made up less than 10 per cent of Singapore's electricity needs before the conflict. The physical gap was manageable. Singapore GasCo, set up in 2025 to centralise gas procurement, bought additional cargoes from outside the Middle East, and a standby LNG facility created after the 2021 crisis gave generators a fallback. The price impact was harder to avoid.
Why the tariff jumped in July
Singapore's regulated tariff is reset every quarter, and its energy cost component is based on average gas prices in the first two and a half months of the preceding quarter. The gas itself is mostly bought under contracts linked to oil prices.
That lag explains the shape of the increase. The April to June tariff rose only 2.1 per cent, because it captured just the period from 28 February to 15 March. The July to September tariff reflects gas prices from 1 April to 15 June, a period when, in the words of SP Group, "global fuel prices were very high due to the Middle East conflict."
The IEA's Gas Market Report for the third quarter puts numbers on that period. Spot LNG prices in Asia averaged USD 17.5 per million British thermal units in the second quarter, up 45 per cent year on year and the highest second-quarter average since 2022. Brent crude futures peaked at more than 60 per cent above pre-conflict levels in late April, which matters for Singapore because oil-indexed contracts follow crude with a delay.
How data centres pay
Large data centres in Singapore typically do not buy at the regulated household tariff. They contract with retailers or buy at prices linked to the wholesale market, the Uniform Singapore Energy Price (USEP). The EMA said in March that most consumers were "cushioned" from immediate volatility by fixed-price retail contracts or the regulated tariff, but warned that customers on retail contracts "may see an increase in electricity prices at the point of contract renewal, if fuel costs remain elevated at that point."
That is the exposure for operators. A data centre whose power contract renews during a period of high gas prices locks in a higher cost for the length of the new contract. Because cooling and IT loads run around the clock, data centres cannot shift consumption to cheaper hours the way some industrial users can.
The memory of 2021 is still fresh. The USEP reached S$491.24 per MWh in October 2021 and S$492.09 per MWh in May 2023, according to Energy Market Company data cited by The Business Times. Five retailers left the market in late 2021 after failing to hedge. Since then, the EMA has added a temporary price cap that acts as a circuit breaker during periods of sustained volatility.
Growth plans meet a gas constraint
Singapore has taken a selective approach to data centre growth. Its Green Data Centre Roadmap, announced in May 2024, aims to provide at least 300 MW of additional data centre capacity in the near term, with a further 200 MW or more possible for operators that use green energy. At the time, data centres accounted for 82 per cent of the information and communications sector's emissions and 7 per cent of national electricity use, according to the Senior Minister of State for Communications and Information.
In October 2025, the Economic Development Board and JTC said Jurong Island would host Singapore's largest low-carbon data centre park, with 20 hectares reserved, alongside about 300 hectares set aside for new energies including a hydrogen-ready gas power plant and an ammonia power project.
Each of those steps adds load to a system that, for now, means burning more gas. Almost every new megawatt of data centre demand in Singapore is, at the margin, a demand for imported gas, and a growing share of that gas is LNG bought on international markets.
What the shock teaches
The Hormuz disruption has not stopped Singapore's data centre plans, and supply was never seriously at risk. What it has done is make the cost of the city-state's energy model visible. Three lessons stand out.
First, diversity of LNG supply matters more than volume. Qatar was a large source of Singapore's LNG but a small share of its total electricity, and the ability to buy elsewhere limited the damage.
Second, pricing mechanisms with lags can hide a shock for a quarter and then deliver it all at once. Operators budgeting on the basis of the April tariff would have been surprised by July.
Third, the case for importing low-carbon electricity, which Singapore is pursuing through cross-border projects in the region, is also a case for energy security. Power from a wider range of sources and fuels would reduce the link between data centre costs and a single sea lane.
SP Group noted that if the situation in the Middle East improves, tariffs for the fourth quarter may fall. For data centre operators negotiating contracts this year, the question is whether to lock in now or wait for a calmer market.