Malaysia tightens borders to fight fuel smuggling amid global energy crisis

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The move comes amid concern that rising fuel prices abroad could make it more profitable to smuggle subsidised fuel out of Malaysia

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Fuel pump nozzles are pictured at a petrol station in Kuching, Sarawak. Malaysia will keep subsidised petrol prices unchanged despite the global increase in crude oil costs. Photo: AFP

Iman Muttaqin YusofMalaysia will tighten border enforcement to curb fuel smuggling and keep subsidised petrol prices unchanged as the widening US-Israeli war with Iran disrupts energy flows through the Strait of Hormuz and rattles global oil markets.

The move comes amid concern that rising fuel prices abroad could make smuggling subsidised fuel out of Malaysia more profitable.

“The most worrying aspect is that this conflict has an impact on the global economy, Asia and Malaysia,” Prime Minister Anwar Ibrahim said at a special press conference on Wednesday. “The more serious problem is disruption to oil and gas supplies, which usually pass through the Strait of Hormuz.”Advertisement

He said the government had decided to keep the pump price of subsidised RON95 at 1.99 ringgit (50 US cents) unchanged despite the global increase in crude oil costs, and ordered tighter monitoring of subsidised fuel movements to curb smuggling.

“This is a difficult decision, but it will be maintained at 1.99 ringgit a litre even though the market price is much higher,” he said, without elaborating on how much more the government would spend on subsidies.

Prime Minister Anwar Ibrahim says state-oil firm Petronas has assured the government that Malaysia’s petroleum product supply remains secure and sufficient until at least May. Photo: Pool via AP
Prime Minister Anwar Ibrahim says state-oil firm Petronas has assured the government that Malaysia’s petroleum product supply remains secure and sufficient until at least May. Photo: Pool via AP

Malaysia has long grappled with fuel leakages because subsidised petrol and diesel are sold well below market rates, making them attractive to syndicates operating near land and maritime borders.

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