Malaysia: No quick fix for fuel prices

Malaysia cannot use funds from Petroliam Nasional Bhd. as a quick fix to lower fuel prices because the state oil company needs resources to expand and compete globally, a finance official was quoted as saying Monday.

Malaysia, a net oil exporter, heavily subsidizes retail fuel prices but has warned it may have to reduce subsidies this year after global oil prices recently breached $100 a barrel.


Second Finance Minister Nor Mohamed Yakcop was quoted by the New Straits Times as saying that Petronas — as the national oil company is also known — was already financing various government projects and needs funds to expand abroad to ensure it remains competitive and profitable.

“Petronas has to look for new resources as our natural oil and gas reserves are expected to run out by 2011,” he said.

“This reinvestment effort comes at a huge cost and we cannot simply stop Petronas from expanding just for the sake of a quick fix for global petrol price hikes.”

AP