Fear of an energy crisis has engulfed much of Southeast Asia since the US and Israel launched air strikes on Iran on February 28, pushing Tehran to close the Strait of Hormuz – a vital waterway that handles about a fifth of the world’s oil and gas supply and energy deliveries from the Middle East to Asia.
Global crude prices have surged since the start of the war, with Brent crude prices spiking by 63 per cent to a high of US$119 per barrel on Monday before settling to about US$100 per barrel later in the week.
To cushion the blow on consumers and local businesses, Malaysia’s government on Friday said it would spend about 3.2 billion ringgit (US$812.8 million) a month to maintain the price of subsidised petrol and diesel in the short term.
“This will raise the cost of subsidies by [more than] 2 billion ringgit, compared to 700 million ringgit that was budgeted before this,” Second Finance Minister Amir Hamzah Azizan told a news conference.