Petrol-driven price gains in March raise fears of broader cost pressures ahead.

Singapore’s inflation picked up in March, led by higher petrol and retail prices, with policymakers and analysts warning that the Iran war could soon lift the cost of more goods and services.

Headline And Core Inflation Edge Higher
Overall inflation rose to 1.8 per cent year on year in March 2026, up from 1.2 per cent in February, the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) said on April 23. Core inflation, which excludes private transport and accommodation, climbed to 1.7 per cent from 1.4 per cent, reflecting rising everyday costs for households. The agencies warned that imported cost pressures are expected to “pick up and broaden” as higher energy and input prices linked to the Middle East conflict feed through global supply chains.

Petrol Surge Drives Private Transport Inflation
Private transport inflation jumped from 2.4 per cent in February to 6.6 per cent in March, mainly due to higher petrol prices following the Iran war. Market analyst Zavier Wong from trading platform eToro noted that pump prices have been rising since late February, with March the first month where the full impact appeared in official data. He said energy costs typically move from transport into logistics, food production and services over time, suggesting further pass-through is likely in coming months if conditions persist.

Retail, Services And Future Utility Bills
Retail and other goods inflation accelerated to 1.8 per cent in March from 0.6 per cent, driven by larger price increases for alcohol, tobacco, clothing and footwear. Services inflation inched up to 2.1 per cent from 2.0 per cent, as point-to-point transport and telecommunication costs rose. Electricity and gas prices were still down 4.3 per cent year on year in March, but MAS noted that higher global gas prices will show up in regulated tariffs from the second quarter of 2026, because the tariff is set based on average gas prices in the first 2½ months of the preceding quarter. Tariffs for April to June have already been raised.

Food, Housing Stable But Risks Building
Food inflation remained at 0.6 per cent in March, with non-cooked food prices rising at the same pace as in February, while accommodation inflation was unchanged at 0.3 per cent as rents stabilised. Still, DBS Bank senior economist Chua Han Teng warned that overall price pressures remain in the early stages and face “broadening upside risks.” He highlighted higher energy costs translating into delivery, logistics and utility bills that firms may pass on to consumers amid margin pressures, and flagged concerns that costlier fertilisers from Middle East disruptions could eventually push up global agricultural and food prices.

Policy Tightening And Geopolitical Uncertainty
On April 17, MAS raised its 2026 forecasts for both headline and core inflation to 1.5 to 2.5 per cent, from an earlier 1 to 2 per cent, and tightened monetary policy to allow a stronger Singapore dollar to dampen imported inflation. Mr Chua said MAS is likely to maintain policy flexibility given elevated uncertainty around the Iran conflict and its economic impact. Mr Wong added that ceasefire talks between the United States and Iran are under strain, and disruption at the Strait of Hormuz remains unresolved. If the conflict extends through the second quarter, he said, the transmission of higher energy costs into food, logistics and services will become “considerably harder to dismiss” for both policymakers and households.

The March uptick in Singapore’s inflation signals that higher global energy prices are starting to filter into local costs, even as food and housing remain relatively stable for now. For Indonesians and Singaporeans, the outlook hinges heavily on developments in the Middle East; a prolonged conflict could tighten margins for businesses, lift utility and transport bills, and push regional central banks to juggle inflation control with growth risks more aggressively.

Sources: Straits Times (2026) , CNA (2026)

Keywords: Core Inflation Singapore, Petrol Price Increase, Strait Of Hormuz Risk, MAS Policy Tightening, DBS Economic Forecast, Supply Chain Costs