Everyone is feeling the pinch of rising oil prices. The latest hit? Right at the fuel pump.
Before the Iran War, the major petrol stations in Singapore were offering 95-octane petrol at S$2.88 per litre. That’s now risen to S$3.47—a 20% increase. Ouch.
But there’s one petrol station bucking the trend. Cnergy is offering 95-octane at just S$2.41 per litre. Naturally, long queues have formed at its Dunman outlet—so long that cars were blocking the nearby bus stop, obstructing passengers from boarding and alighting. That’s how cheap the petrol is.
The parent company of Cnergy? Union Gas. You’ve probably seen the brand before—the famous blue LPG logo plastered on coffeeshop tables and signboards everywhere. That’s because Union Gas sponsors these items for its coffeeshop clients, who happen to be some of its largest gas customers. Smart marketing, if you ask me.
The Queue Effect
The viral queues and media coverage of Cnergy’s low prices may have been the catalyst behind Union Gas’s recent share price surge. The stock is up 37% in the past five days.
You might think it’s an Iran War play—but here’s the disconfirming evidence: the stock didn’t budge when the war broke out on 28 Feb 2026. It only started moving on 12 Mar 2026.
So we reckon it’s more likely the queue effect—the sudden attention brought to a small-cap stock that most investors wouldn’t have linked to oil prices as readily as the big oil names. Small float of shares, increased demand, share price boomed. Sometimes, all it takes is a viral moment.
How Can Cnergy Be So Cheap?
Cnergy is offering more than 30% below the likes of Esso and Shell. How is that even possible?
Cnergy doesn’t do oil exploration. It operates more like a distributor—buying petrol and natural gas wholesale, then selling at retail. So it’s not a case of getting cheaper oil from the ground.
The more likely explanation? Lower operating costs and a deliberate strategy by management.
Cnergy only has four outlets, of which just three offer petrol and diesel. That’s a much smaller station network, and the real estate costs are naturally lower. The stations themselves are spartan—no rows of snacks and drinks, no full-service convenience stores. Just vending machines and self-payment kiosks. No credit card tie-ups, no membership point programmes.
If Sheng Siong operated a petrol station, it would probably look like Cnergy.
All those cost savings get passed directly to customers in the form of lower fuel prices.
A Strategy to Win Market Share
This looks like a deliberate play by management. You can’t fight the big boys by copying them. So instead of competing on frills, Cnergy chose to compete on price—sell higher volumes at lower margins, rather than not selling much at all.
And they’ve been smart about targeting, too. Cnergy goes after private-hire vehicle (PHV) and taxi drivers—the group that uses the most fuel and represents a sizeable pool of regular customers. They can sign up for a one-time fee of $5 and receive $6 in discounts in return, plus ongoing PHV and taxi driver rates at just S$2.26 per litre for 95-octane.
That’s a no-brainer for any Grab driver filling up daily.
But Does It Show Up in the Numbers?
Here’s where it gets tricky. Looking at FY2025 results, cost of sales has been rising faster than revenue. Cost of sales is predominantly the cost of buying fuel from suppliers—and when oil prices rise, that goes up. Revenue depends on how much Union Gas can pass down to customers.
In the last six months of FY2025, revenue rose 15.7% while cost of sales jumped 24.9%. Gross margin compressed from 39% to 35% compared to the same period in FY2024. This tells us Union Gas is deliberately undercutting its own margins to win customers—it’s not fully passing down the cost increases. And that’s even before the Iran War where oil prices has gone up a lot more.
Diving into the segments, Cnergy sits within the Liquid Fuel segment, which contributes about 22% of total revenue. The core business remains LPG and natural gas. So while Cnergy’s growth can meaningfully increase its revenue contribution going forward, it’s still the smaller piece of the pie.
And here’s the important part—the Liquid Fuel segment reported roughly S$1 million in losses in FY2025. That’s another sign of subsidising customers to gain market share. The good news? The loss isn’t deep, and we believe it can turn profitable in FY2026—but only if management starts passing a bigger proportion of fuel costs to customers.
An Inspiring Home-Grown Story
Overall, Union Gas is an inspiring home-grown company. You can see the strong entrepreneurship DNA in its management.
Founder Mr Teo Kiang Ang started the business in 1974, delivering cooking gas on a bicycle. He’s since built Union Gas into the largest LPG supplier in Singapore. Now, the company is branching out into other energy plays—operating refilling stations and going toe-to-toe with the world’s biggest oil companies. He also started Transcab in 2003, though that’s a separate entity.
That kind of entrepreneurial spirit should be celebrated. Union Gas is definitely a company to watch.
