The government is diversifying fuel imports, maximising domestic production and locking in longer-term supply arrangements as rising global energy prices increase pressure on Malaysia’s businesses and households.
Economy Minister Akmal Nasrullah Mohd Nasir said the three-pronged strategy is aimed at securing sufficient fuel supplies through December 2026 while reducing Malaysia’s exposure to disruptions in any single country or trade route.
Malaysia is sourcing crude oil and petroleum products from a wider range of regions, including the Americas, while exploring alternative supplies from Africa as instability in the Middle East continues to disrupt energy flows.
The measures come as prices of all three major energy inputs — crude oil, liquefied natural gas (LNG) and coal — moved higher in September.
Brent crude averaged US$90.88 per barrel in August, up 8.9% from July, before exceeding US$120 per barrel this week. LNG rose 13.2% to US$21.87 per MMBtu in August and approached US$30 by mid-September.
Coal prices, meanwhile, climbed to US$148 per tonne on Sept 10 from an August average of US$130.67, directly increasing electricity generation costs.
To cushion households from rising costs, the government has expanded electricity bill protection to domestic users consuming up to 800 kilowatt-hours (kWh) a month, from 600 kWh previously.
Eligible households are also exempt from the Automatic Fuel Adjustment, retail charges and sales and service tax from September through Dec 31, 2026.
Despite higher power consumption, Akmal said the electricity system remained adequately supplied. Peak demand reached 21,949 megawatts on Sept 9, 4.7% above the August average, but remained within the existing reserve margin.
The government is also cushioning businesses from rising operating and working capital costs.
A RM5 billion SME Stabilisation Relief Facility under Bank Negara Malaysia has been made available, with RM2.8 billion approved for more than 4,900 SME accounts as of Aug 7.
This is complemented by up to RM10 billion under a credit guarantee scheme for SMEs and microenterprises, of which more than RM5 billion has been utilised.
Akmal said the government’s priority is to keep domestic supply chains functioning and ensure global cost pressures do not excessively undermine household welfare or economic activity.
