SHOULD we be taking the handbrake off on our fuel savings efforts now that the conflict in Iran is said to be on the wane?
Well, first of all, the on-again-off-again ceasefire resulting from the United States and Israel attack on Iran suggests that we cannot really bank on a lasting cessation of hostilities just yet.
Secondly, the consequences of the conflict on the global fuel market, despite pronouncements of light at the end of the conflict, is dubious at best. The confusion at the Strait of Hormuz, for instance, through which 20 per cent of global fuel passes through, still continues, and many oil infrastructure are either destroyed, damaged or closed.
Global supply has been compromised and fuel prices have been yo-yoing for the past months or so as good news is followed by uncertainty in a matter of days.
At the same time, competition for other resources such as fertilisers, polymers, aluminium and helium is also expected to intensify globally, which will have significant impact on the global economy. Things are looking less rosy now and in the near future, than when the United States and Israel attacked Iran almost two months ago.
At home, national oil company Petronas has been actively scouring the global market for crude and have extended the assurance of supply by another month to end June. While during pre-crisis it supplied 50 per cent of the petrol, diesel, cooking gas and jet fuel needs, these days it needs to take up the slack from Shell, Petron, Caltex and BHp as seen by the number of stations that were dry this past week.
Malaysians’ appetite for fuel remains high, currently at a combined 2.3 billion litres of petrol and diesel per month, one of the highest per capita in the world. A third of the amount has to be imported, of which 40 per cent comes through the Strait of Hormuz.
The cost of making sure that Malaysians get fuels, which are subsidised, too, in these troubled times has gone up significantly. Thus far, Petronas is spending RM650 million a month to get the supply to ensure energy security. In fact, actual delivered prices for crude could be even higher with freight cost tripling and insurance increasing by 16 times.
“For energy security, Petronas has to do it,” said Tan Sri Hassan Merican, chairman of the Crisis Management Task Force under the National Economic Advisory Council that is responsible for reviewing on a daily basis on actions that need to be taken following conflict in the Middle East.
This is on top of the up to RM6 billion to be spent monthly by the Government to subsidise petrol and diesel, up from RM700 million per month before the conflict.
Total to be spent by Petronas and the government to ensure cheap fuel if crude were to cost US$100 or more per barrel, could go as high as RM60 billion for this year, it is speculated.
By comparison, Budget 2026 allocates RM46.5 billion for the health sector, including RM1.2 billion to upgrade hospitals and clinics, and RM32.9 billion for defence and security. Education is allocated RM84.8 billion, of which including RM2 billion is to improve 520 dilapidated schools.
Such money spent to keep fuel prices low obviously brings into question the need to encourage prudence in fuel usage and to avoid wastage. While most Malaysians would be appreciative of cheaper fuel, imagine how many schools could be improved every month with the billions spent to keep RON95 at RM1.99.
This is perhaps the philosophical question we have to ask ourselves — are cheaper petrol or diesel more important than our schools and hospitals?
Of course, we are not asking to choose one over the other, but we should look into balancing the competing needs that we have.
15 million barrels daily of crude have been removed from the market as a consequence of the conflict. Experts suggest that even if the war were to end today, normal service in the form of global fuel supply would only be attained by the first quarter next year. Till then, we would likely be in an environment of erratic supplies and a higher crude price regime.
With much publicity it was shared that the ship Ocean Thunder arrived a few days ago with a million barrels of crude from Iraq as part of Petronas’ effort to make sure we have the fuel needed. It would take six days to refine the crude into diesel, petrol, cooking gas and jet fuel. Well done to Petronas, but the way we our consumption is, we would be lucky if the products processed from the shipment could last us three days.
“Prudent fuel usage and avoiding wastage are critical,” said Hassan, and this prudence should extend beyond the conflict as keeping energy security is costly. It is especially costly if we do not value it.
We should not allow a crisis to go to waste. There is something that we can learn from it. Perhaps a re-look at our strategy in subsiding and keeping pump prices low that is not encouraging consumers to reflect on their fuel consumption habits. That is costing the country significantly and could affect its ability to fund other needs.
So the answer to the philosophical question at the start of this is, no. We should not be letting the handbrake off when managing our fuel consumption. Furthermore, the conflict has broad global economic consequences that experts suggest are only beginning. – April 20, 2026
Datuk Zainul Arifin is the Chief Executive Officer of Big Boom Media that publishes Scoop.my