Malaysia works to secure fuel supply beyond June: economy minister

[KUALA LUMPUR] Malaysia is working to secure fuel supply beyond June and will announce next month progress on plans to extend its inventory, Economy Minister Akmal Nasrullah Mohd Nasir said.

Petroliam Nasional “is having conversations with potential suppliers”, Akmal told Bloomberg Television’s Haslinda Amin in an interview on Thursday (Apr 30). “We need to ensure negotiation is at the right price.”

The government still has the flexibility to administer its fuel subsidies while managing the fiscal deficit, he said. Malaysia has already reduced the subsidised fuel quota from 300 litres to 200 litres per Malaysian and introduced work-from-home options for civil servants to manage demand.

Malaysia remains on track to meet its fiscal deficit target this year despite surging energy prices driving up subsidy costs, Second Finance Minister Amir Hamzah Azizan said previously. The nation’s monthly fuel subsidy bill has risen to an estimated RM7 billion (S$2.3 billion) in April – about 10 times its typical monthly subsidy spending before the Iran war – creating pressure on public finances.

Malaysia’s economy has shown resilience despite global supply chain disruptions, and its strong currency has buffered the impact of higher fuel prices, Akmal said. “Definitely, things are going to be tougher, but we expect growth to continue for the country,” he said. BLOOMBERG