Global oil price uncertainty may pressure cost of living, comprehensive preparedness needed

KUALA LUMPUR (March 24): Uncertainty of global oil prices due to geopolitical conflicts could increase pressure on the cost of living, requiring comprehensive preparedness by the government as well as greater awareness among consumers, Federation of Malaysian Consumers Associations (FOMCA) chief executive officer T Saravanan said.

He also said that the government must ensure that monitoring and intervention mechanisms are implemented effectively, including transparent communication, supply chain monitoring, and control measures if necessary to prevent price manipulation or supply shortages.

“FOMCA advises consumers to remain calm and not be influenced by speculation or unverified information, to spend prudently by prioritising needs over wants, and to avoid panic buying that could disrupt market supply,” he told Bernama today.

He said global oil crises can indirectly affect consumers in Malaysia, particularly through rising transportation costs, higher prices of goods, and increased pressure on the cost of living.

Although Malaysia still has several price control mechanisms and subsidies, he noted that prolonged global uncertainty could strain the country’s fiscal position and ultimately impact consumers.

“From an awareness perspective, Malaysian consumers are generally still less sensitive to how geopolitical conflicts can affect their daily lives. In the current situation, especially during festive seasons, there is a risk of panic buying if information is not communicated clearly and accurately.

“If the conflict (in West Asia) continues, the direct impact may include rising fuel prices, logistics costs, and eventually higher prices of food and essential goods. This could place particular pressure on low- and middle-income groups,” he said.

Meanwhile, Institute for Inclusive Development and Advancement Malaysia (MINDA-UKM) director, Noor Azlan Ghazali said rising global oil prices are expected to have widespread effects on the global economy, including transportation costs, production costs, food prices, inflation, and monetary policy.

He said as an open economy with high dependence on global developments, Malaysia must carefully assess and be prepared for the possibility of continued pressure arising from energy market uncertainty.

According to him, although Malaysia is an oil-producing country, it is not a price setter in the global market but rather a price taker.

He said the country’s oil reserves are estimated at around 2.7 billion barrels, expected to last about 12 years – far smaller compared to major producers such as Saudi Arabia.

In addition, Malaysia’s oil production of about 570,000 barrels per day is still insufficient compared to domestic consumption estimated at 747,000 barrels per day, making the country a net oil importer.

In this regard, he suggested the government review fuel pricing mechanisms at the pump and continue implementing more targeted subsidies in line with global oil price developments.

Noor Azlan added that all parties, including the government, industry, and the public, must work together to face the challenges of current geopolitical uncertainties without placing blame. – Bernama