KUALA LUMPUR, March 19 (Xinhua) -- Ongoing energy disruptions resulting from the continuing conflict in the Middle East have resulted in spillover effects on the Southeast Asian region, particularly affecting the energy price, trade logistics and food security.
Malaysia, which is deeply integrated into global trade networks, is bracing for impact. Economy Minister Akmal Nasrullah Mohd Nasir told a recent forum that while higher oil prices may lift dividends for Malaysia's state-owned energy firm Petroliam Nasional Berhad (Petronas), the gains would likely be offset by increased costs of imported refined petroleum products.
Akmal Nasrullah said the current situation underscores the need to diversify its energy sources, strengthen domestic generation capacity, and accelerate renewable and transition technologies to manage such risks.
"These developments show that energy security is inseparable from economic resilience. It's about preparing a system that can maintain reliable, affordable and stable energy supplies even amid global volatility and high oil price scenarios," he said.
Fuel prices have already seen a sharp spike in Malaysia with RON97, a premium-grade petrol, rising from 3.85 ringgit (about 0.97 U.S. dollars) to 4.55 ringgit per liter, while diesel in Peninsular Malaysia has surged from 3.92 ringgit to 4.72 ringgit per liter. The government is maintaining its subsidy program for the commonly used RON95 fuel at 1.99 ringgit per liter, while those who do not qualify for the subsidy will pay 3.27 ringgit per liter.
The Finance Ministry said in a statement that its strategy is aimed at gradually aligning market prices while maintaining the social safety net for those who qualify for targeted subsidies, with the aim of preventing a drastic spike in the cost of living for low- and middle-income households.
Beyond energy prices, the conflict is directly disrupting the operations of Malaysian businesses. A survey by the Malaysia External Trade Development Corporation revealed that over 60 percent of Malaysian exporters expect to be impacted, with businesses reporting expected drops in sales, order cancellations and rising raw material costs.
Around 39 percent of respondents export to the Middle East, mainly the United Arab Emirates and Saudi Arabia, and many are considering diversifying to other markets, particularly those involving palm oil, manufacturing, agriculture and aviation. The agency also advised exporters to re-route shipments through safer regional ports as tensions disrupt key shipping routes, including the Strait of Hormuz.
While Malaysia's direct food imports from the Middle East are limited, the indirect effects of the conflict pose a significant threat to food security. The rise in global oil prices leads to higher costs for fertilizers, packaging and freight -- all critical components of the food supply chain.
Rice is a key staple not only in Malaysia but across the region. Malaysian Agriculture and Food Security Minister Mohamad Sabu said Malaysia has about 1.09 million metric tonnes of rice as of Feb. 3, comprising 200,000 metric tonnes of buffer stock and 889,285 metric tonnes of trade stocks, which is estimated to last up to six months.
He added that the ministry is working with the finance ministry and economy ministry to formulate a specific strategy to address the impact of rising global oil prices on the country's food sector, adding that current supplies of basic foods such as rice, chicken and vegetables are at a sufficient level at least until May and advising the public not to engage in panic buying. ■