Petronas has taken to Facebook to explain how Malaysia is affected by the ongoing conflict in West Asia despite being an oil producer.
According to the company, the conflict has disrupted the global oil supply chain, most notably involving the Strait of Hormuz that remains largely closed to shipping. As a key corridor for nearly one-fifth of global oil and liquefied natural gas (LNG) flows, this has resulted in the price of crude oil to go up by almost 40%, with the cost of shipping, insurance and logistics also affected – this has seen fuel prices go up.
In Malaysia, crude oil is used to make petrol, diesel, liquefied petroleum gas (LPG) and aviation fuel, with 48% of these fuels being supplied by Petronas while the remaining 52% is from other oil companies in the country. Although Malaysia is an oil producer itself, it is still affected by the conflict because more than half of the crude oil processed into these fuels by refineries here is imported.
This is because domestic crude oil production isn’t sufficient to meet domestic demand. Petronas’ infographic indicates 48% of the crude oil needed is produced in Malaysia, while 38% is brought in from countries through the Strait of Hormuz. The remaining 14% is also imported, split equally between Southeast Asia and West Asia as well as other sources.
Petronas says it expects supplies at its petrol stations to be enough until at least the end of May this year and it has taken proactive measures to secure the country’s fuel supply. It adds that the prices of fuels are under the purview of the government and that the subsidies for petrol and diesel remain active. Users will still have access to fuels for their daily use but are advised to be prudent with their usage.
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