Annual March rate shows impact of Iran war, which also pushed up cost of food and air fares

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UK inflation accelerated to 3.3% in March after the Iran war triggered the biggest jump in fuel prices for more than three years.

In the first official snapshot of the damage to living standards in Britain from the US-Israeli war on Iran, the Office for National Statistics (ONS) said the consumer prices index increased last month from a rate of 3% in February. The rise matched the forecasts by City economists.

The trend has been accelerated by the US-Israel war on Iran, leaving households – and cafe owners – glum, surveys suggest

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For many coffee drinkers, takeaway orders are changing from a habitual purchase to an occasional treat, as elevated petrol prices and other living costs leave households feeling glum.

This rapid shift in behaviour has disappointed cafe owners and surprised economists, raising an uneasy question: if takeaway coffee sales are falling, is the economy next?

SINGAPORE: Hawker meals across Singapore could soon become more expensive, as stallholders grapple with mounting cost pressures driven by higher ingredient prices, energy costs and fuel-related surcharges.

Some vendors have already raised prices by between 50 cents and S$1, while others say increases may be inevitable if current conditions persist. The squeeze has been intensified by global factors, including the ongoing conflict in the Middle East, which has pushed operating expenses higher and cut into already thin profit margins.

CNA reported that at Singapore’s largest hawker centre, the Chinatown Complex Food Centre, more than 220 stallholders have been feeling the strain in recent weeks. According to the chairman of the Chinatown Complex Hawkers’ Association, Mr Cornelius Tan, operating costs have climbed by an additional 10 per cent over the past month.

Mr Tan told CNA that hawkers are being hit from multiple angles. Beyond rising ingredient costs, higher delivery fees driven by fuel surcharges are compounding the burden. As most hawkers rely on multiple suppliers for items such as poultry, vegetables and other essentials, the added charges can stack up quickly.

“With multiple deliveries each day, if every supplier imposes a fuel surcharge, the effect multiplies,” he told CNA, adding that hawkers are now paying more for the same quantity of raw materials than before.

The association has been asked to inform authorities if gas prices spike significantly, but many stallholders say the pressure is already acute. Some report profit declines of up to 20 per cent, leaving little room to absorb further increases without passing costs on to customers.

Similar challenges are being reported at Bedok Food Centre, where hawkers are also contending with reduced footfall. Several stalls there have seen daily takings fall by at least 20 per cent, compounding the impact of higher expenses.

While many Bedok vendors have so far resisted raising prices, the local hawkers’ association is calling for temporary relief measures. Its chairman, Hajjah Roziah Adon, told CNA that rental discounts could help businesses stay afloat during this difficult period.

Industry groups are also stepping in to ease the strain. The Federation of Merchants’ Associations of Singapore has been working with hawkers and suppliers to keep costs manageable, including expanding bulk purchasing efforts to secure better pricing.

In addition, hawkers are being encouraged to explore alternative revenue streams, such as building a stronger online presence and tapping into government funding schemes aimed at supporting grassroots initiatives and preserving hawker culture.

This article (Hawkers feel the squeeze as Middle East conflict drives up costs in Singapore) first appeared on The Independent Singapore News.

SINGAPORE: Despite earning some income from an internship, one polytechnic student shared that they are still “feeling the pinch” as food prices continue to climb.

In a post on an online forum, the student wondered if others were quietly struggling too. “Does anyone else feel like the cost of eating out in SG has gotten genuinely unmanageable for students/young people? I don’t know if it’s just me, but I feel like even hawker food prices have crept up so much over the past couple years.”

Citing an example, they shared that a full meal at the kopitiam near their place used to cost around “S$3 to S$4,” but now the same food is going for “S$5.50 or S$6.”

To make matters worse, they said portions seem to have shrunk, leaving them paying more while somehow getting less.

“Like, I get that costs go up for the hawkers too: rental, ingredients, all that. Not blaming them at all, but it just feels like the whole ‘SG is affordable’ thing is slowly becoming less true for people who aren’t earning a full salary yet. Anyone else navigating this, or have tips for eating on a budget without just eating instant noodles every day?”

“Try to bring your own food from home.”

In the discussion thread, many users agreed with the student’s sentiments, saying that it has become increasingly difficult to manage daily expenses in recent years.

One said, “It’s not just you, prices have indeed gone up rapidly since COVID, even if the ones who are earning a decent income don’t feel the pinch yet. It’s definitely impacting low-income Singaporeans as well, not just students.”

Another shared, “You’re not wrong to feel this way. Even as office workers, I see more of my colleagues making coffee with sachets or keeping a bottle of instant coffee or box of tea bags and some biscuits or nuts in their desks instead of buying tea or coffee or snacks since most pantries at least have hot water, and some have a fridge.”

A third added, “Costs in Singapore have gone up quite a bit. Not just food, but also public transport. I do feel your pain!”

To manage the rising cost of living, some users also encouraged the student to start learning how to cook and prepare meals at home.

One told them, “You can actually meal prep yourself to save money if you really can’t afford it. Buy those 1/2 kg frozen chicken thighs from the supermarket, frozen mixed greens, eggs, and rice. Pretty complete nutrition from these ingredients alone.”

Another commented, “As the others have suggested, if possible, try to bring your own food from home. It can be heated-up leftovers from dinner. Or do your own meal prep if you can find the time. Definitely bring your own water bottle everywhere and make use of coolers.”

In other news, a groom expressed that he felt upset after his own parents did not give him a red packet on his wedding day.

In a post on the r/askSingapore forum on Monday (March 6), he said that growing up, his parents had always emphasised the importance of giving generously at weddings.

Read more: ‘No blessing from my parents’: Groom upset after receiving no Ang Pao at wedding

This article (Student says hawker meals now cost up to S$6, feels eating out is ‘unmanageable’) first appeared on The Independent Singapore News.

The prime minister has weathered the crises – for now – and there is a growing recognition that Australia is too vulnerable to world events

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Anthony Albanese’s fuel diplomacy tour of Asia has already started paying dividends, but the real test could still be to come.

After last week’s rush to Singapore and pulling forward a planned visit, the prime minister dashed back to Australia from Malaysia on Thursday, to survey the damage at one of the nation’s only remaining fuel refineries. The hastily arranged trips, were to show a leader on the job; to demonstrate Albanese’s attention to the fuel crisis.

Prime minister says Corio refinery fire will not push Australia into stage 3 restrictions, despite reduced production of petrol, diesel and aviation fuel

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Anthony Albanese says petrol production has fallen 40% at one of Australia’s two remaining oil refineries but the damage caused by fire at the Geelong facility will not lead to fuel restrictions.

Petrol prices have fallen below $2.10 a litre and diesel below $3 a litre in most cities, as a price spike predicted to follow the refinery shutdown failed to materialise on Friday.

JAKARTA: As the price of crude oil has surged amid the war in the Middle East, most countries in Southeast Asia have seen pump prices go up as fuel supplies have gone down.

Indonesia, however, is proving to be an exception in the region, choosing to allocate billions in subsidies to keep the price of fuel at pre-war rates.

While this decision has allowed Indonesians to live undisrupted lives, Indonesia may pay for it dearly later on.

Pre-Iran war prices

The conflict in the Middle East, which started on Feb 28 when the United States and Israel began bombing Iran, has resulted in all but closing the Strait of Hormuz, through which a fifth of the world’s fuel supply passes. Since much of this supply is headed to Asia, countries on the continent have been disproportionately affected, grappling with crude oil that has gotten 50% to 65% more expensive since the war began, as well as scrambling to ensure they have enough supply for domestic needs.

In country after country in Southeast Asia, including Singapore, pump prices have gone up, and countries with fewer resources have suffered the most. In the Philippines, the price of diesel has gone up by as much as 81.6%, in Cambodia by 78.7%, and in Myanmar by 76.9%, for example. In countries such as Malaysia and Brunei, some fuels have gone up in price, while others have remained subsidised.

In Indonesia, however, the situation is very different.

“Amid the economic fallout from the Iran war, Indonesia has managed what most countries have struggled to do: keep domestic fuel prices steady during one of the worst oil shocks in years. Subsidised petrol (mid-grade, RON 90) remains capped at US$0.60 (S$0.76) per litre, while subsidised diesel (a blend of fossil fuel and palm oil-based biodiesel) stays at US$0.40 (S$0.50), even as Brent crude surpasses US$118 (S$150),” the Lowy Institute wrote on April 7.

The Indonesian government has taken upon itself to absorb fuel price shocks instead of passing this on to its citizens, announcing that it has no intention to raise prices, at least in the short term. 

What enabled Indonesia to do this is large direct subsidies, in addition to compensation to state companies. The government allocated IDR 381.3 trillion (S$28.58 billion) for this purpose, paying companies such as Pertamina to sell fuel below market price.

As a result, Indonesian households are able to maintain their purchasing power as prices remain stable. Inflation is kept low, the cost of living stays the same, economic shock is avoided, and perhaps most importantly, political stability is maintained.

This strategy of intervention is not new, and Indonesia has resorted to subsidies time and again when oil prices have risen. And with good reason, given that major price hikes in recent history, including as recently as 2022, resulted in protests and unrest that led to political backlash.

The risks of not raising fuel prices

Should the war in the Middle East be prolonged, however, and Indonesia continues to subsidise fuel, there are long-term risks down the road, including a fiscal deficit that could exceed the legal cap of 3% of the country’s GDP.

Allocating a significant amount could also mean less money for infrastructure, healthcare, and education.

Additionally, should the rupiah weaken, this would mean higher import costs and an even bigger subsidy bill. Analysts have already sounded the warning bell that prolonged subsidies could strain public finances. /TISG

Read also: Up to S$380 billion in losses, 9 million at risk of poverty as war hits Asia-Pacific

This article (Indonesia refuses to raise fuel prices but could pay the price later on) first appeared on The Independent Singapore News.