Utility bills in S'pore could be affected as carbon tax rises in 2026

Households' utility bills could rise as Singapore's carbon tax has almost doubled in 2026 to $45 per tonne of greenhouse gas emissions.

- Shabana Begum Correspondent

The total electricity and gas utility bill of an average four-room HDB flat will go up by about $3 a month, a government spokesperson told The Straits Times on Jan 21. This is assuming other market forces that influence the quarterly tariffs remain constant, and excluding goods and services tax.

There is some respite until March, at least, as households will pay less for electricity and gas until then due to lower energy and fuel costs. In addition, households are given rebates to help cushion the impact.

The spokesperson said the decline in energy costs this quarter more than offset the impact of the carbon tax increase. It was previously reported that electricity tariffs for homes will decrease by 0.84 cent per kilowatt-hour (kWh), while gas tariffs will fall by 0.67 cent per kWh, from January to March.

Singapore's carbon tax rate has been rising since 2024, to further push large emitters which include the power sector - to reduce their emissions, since the tax puts a price on pollution. The $5 tax rate between 2019 and 2023 was deemed low.

In 2024 and 2025, the tax rate rose to $25 a tonne, up from $5 a tonne previously, with the monthly utility bills of a typical four-room flat rising by around $4. The $45 tax rate for emitters will be in place until 2027, with a view to reaching between $50 and $80 a tonne by 2030.