adminKUALA LUMPUR: The uncertainty in global oil prices following geopolitical conflicts has the potential to increase the pressure on the people’s cost of living, thus demanding comprehensive preparedness by the government and a higher level of awareness among consumers.
The Federation of Malaysian Consumers’ Associations (FOMCA) chief executive officer, T Saravanan, said the government needed to ensure that monitoring and intervention mechanisms were implemented effectively, including transparent communication, supply chain monitoring and control measures if necessary to prevent price manipulation or supply shortages.
“FOMCA advises consumers to remain calm and not be influenced by speculation or unverified news, spend wisely and prioritise needs over wants, and avoid panic buying which could affect market supply,” he said when contacted by Bernama today.
He said the global oil crisis could indeed have an indirect impact on consumers in Malaysia, especially in terms of increased transportation costs, commodity prices and pressure on the cost of living.
Although Malaysia has several price control and subsidy mechanisms, Saravanan said any prolonged global uncertainty could put pressure on the country’s fiscal position, which in turn would affect consumers.
“From an awareness perspective, consumers in Malaysia are generally still less aware of how geopolitical conflicts can affect their daily lives. In the current situation, especially during the festive season, there is a risk of panic buying if information is not communicated clearly and accurately.
“If the conflict (in West Asia) continues, the direct impact may include an increase in fuel prices, logistics costs and ultimately the price of food and essential goods. This could put particular pressure on the low and middle income groups,” he said.
Meanwhile, the Director of the Malaysian Institute for Inclusive Development and Progress (MINDA-UKM), Prof Tan Sri Noor Azlan Ghazali, said the increase in global oil prices is expected to have a wide-ranging impact on the world economy including transportation costs, production costs, food prices, inflation rates and monetary policy.
He said that as an open economic country with high dependence on global developments, Malaysia needs to make careful assessments and be prepared to face possible continued pressure due to energy market volatility.
According to him, although Malaysia is an oil producing country, its position is not as a price setter in the global market but rather as a price taker.
He said the country’s oil reserves were estimated at around 2.7 billion barrels which were expected to last about 12 years, much smaller than major producing countries such as Saudi Arabia.
Apart from that, he said Malaysia’s oil production of around 570,000 barrels per day is still insufficient compared to domestic consumption which is estimated at 747,000 barrels per day, making the country a net importer of oil.
In this regard, he is of the view that the government needs to re-examine the method of determining oil prices at the pump and continue implementing more targeted subsidies in line with developments in global oil prices.
Noor Azlan said all parties including the government, industry and the people need to work together in facing the challenges of the current geopolitical uncertainties without pointing fingers.
– BERNAMA
