Commenting on whether the ongoing conflict in the Middle East could affect Singapore’s carbon tax policy, SMU Professor of Finance Liang Hao said that the recent escalation in the Middle East has pushed oil prices sharply higher and intensified concerns about supply disruptions through the Strait of Hormuz, which typically carries about one-fifth of the world’s gas and crude supply. He also noted that for an energy-importing economy like Singapore, this can increase cost pressure on energy-intensive sectors and strengthen business calls for transitional support. While Prof Liang said that the Government’s broader position is that the carbon tax path is carefully calibrated and that an immediate policy reversal is not expected, a prolonged energy shock could increase pressure for temporary and targeted support measures.
