DPM Fadillah: M’sia prepares contingency measures as Middle East conflict threaten energy, logistics costs (Video)

KUCHING (March 14): Malaysia is prepared with contingency measures to safeguard energy supplies and manage potential cost pressures should tensions in the Middle East escalate into a prolonged crisis, said Deputy Prime Minister Datuk Amar Fadillah Yusof.

He said the government is closely monitoring developments involving Iran in the Gulf region, noting that any extended conflict could disrupt global logistics and raise fuel prices, which would eventually affect transportation and the cost of goods.

“When there is a crisis that causes oil prices to rise, insurance costs also increase.

“This will push up logistics costs, including air transport and sea freight,” he told reporters after the Sumbangsih Santunan Kasih Seindah Syawal programme at the Pusat Khidmat ADUN N7 Samariang here on Saturday.

Fadillah emphasised that higher transportation costs could lead to price increases for imported goods, particularly affecting Sabah and Sarawak due to fuel surcharges.

“It will affect the prices of goods, especially those that we import. They will certainly increase because transportation costs for delivering goods to Sabah and Sarawak will rise.

“There will definitely be fuel surcharges for flights, whether domestic or international,” he explained.

He urged the public to practise energy conservation as part of efforts to extend the country’s fuel reserves.

“If we can save energy, we can reduce the burning of gas and oil, which will help ensure our reserves last longer and hopefully allow us to endure the situation for a longer period,” he added.

Fadillah also noted that Malaysia currently has sufficient gas supply until May, adding that alternative sources have already been secured.

“Petronas has already secured alternative sources of supply.

“Although some shipments still pass through the Strait of Hormuz, most of our supplies come from Australia and other countries,” he said, adding that the government is also exploring other alternatives.

When asked whether the government would continue exporting fuel with reserves estimated to last about two months, Fadillah said Malaysia may consider restricting fuel exports as a last resort if domestic supply becomes critical.

“Petronas has existing commitments under agreements. But if necessary, we will consider all circumstances, including whether exports need to be restricted,” he said.

He stressed that despite the risks, Malaysia’s economic and financial position remains stable compared with many countries in the region, enabling it to better withstand potential shocks.

Meanwhile, Fadillah said that Prime Minister Datuk Seri Anwar Ibrahim has also been approached by leaders in the Gulf region to mediate the conflict and facilitate negotiations.

“We hope and pray that the conflict in the Gulf can be resolved. At the very least, if the waters of the Strait of Hormuz can be reopened, transportation and shipping can continue as usual,” he said.