Malaysia's fuel supply stable, but oil prices may remain elevated for 2 to 3 years — Nurhisham

PUTRAJAYA: Malaysia's fuel supply remains stable despite tightened global supplies, according to Prime Minister's economic adviser Nurhisham Hussein. The government is confident of securing sufficient supplies through the end of the year, with the global fuel situation remaining fluid due to geopolitical tensions and disruptions to key shipping routes.

Malaysia, a major crude oil importer and net exporter of liquefied natural gas (LNG), expects a slow rebuilding of oil reserves over the next two to three years as prices are likely to stay elevated. The Suez Canal and Bab-el-Mandeb remain open, but factors like the Suez Canal and Bab-el-Mandeb remain open, but factors like the Suez Canal and Bab-el-Mandeb remain open, but factors like the depletion of reserves could add to uncertainty in the global energy market.

China's adoption of electric vehicles and its operating refineries at high capacity are helping moderate global oil demand. Meanwhile, a strong El Niño could impact global food supplies, affecting countries such as Southeast Asia, South Asia, Central and Southern Africa, the Caribbean, and Latin America. While global rice supplies are expected to fall slightly, wheat production could decrease significantly.

Soy production is projected to remain strong. Malaysia's overall food supply situation remains adequate, with supply exceeding demand by about 10% across most monitored categories. Fuel sufficiency is guaranteed through the end of September, and Petronas is confident of securing supplies through year-end. Inflation remains manageable at about 2% annually, with food inflation broadly in line with the trend.

The government may need to accelerate spending on critical infrastructure projects, but the longer-term fiscal consolidation objective remains unchanged.