PETALING JAYA: The prices of all goods may see a rise soon due to oil price spike if Iran goes through with its plan to close off the Strait of Hormuz, says Federation of Malaysian Consumers Associations (Fomca).
Fomca secretary-general Dr Saravanan Thambirajah said the closure of the strait, a critical global shipping route for around 20% of oil and 30% of liquefied natural gas in the world, would cause a massive ripple effect on fuel prices globally, including Malaysia.
He said this global fuel price rise would lead to an increase in cost of shipping food and goods, putting many of Malaysia’s key imports of essential food items like wheat, onions and dairy at risk of becoming more expensive.
“While we may not buy them from Iran, the cost of moving goods by sea will go up, which then naturally trickles down to consumers.
“Local food production is not safe either, since our imported fertilisers and farming fuel will become costlier,” he told The Star.
Saravanan said other sectors would also feel the sting as higher fuel prices could lead to increased electricity bills, more expensive public transport and possibly a review of fuel subsidies.
Other industries, he said, could see significant price hikes such as the construction industry, due to higher prices for imported materials, as well as air ticket prices due to a spike in jet fuel costs.
In his view, niche imports from Iran to Malaysia, such as bitumen for road construction, pistachios, saffron and certain petrochemical products, will likely see an immediate price increase due to the war itself.
With this in mind, Saravanan urged the Malaysian government to take steps to secure key necessities beforehand and assure the public as soon as possible.
“They need to monitor the situation closely and if the conflict escalates, the government should look at ways to ensure food supply and manage fuel prices to not burden the public too heavily.
“They should also communicate clearly with the public, to prevent panic buying.
“At the regional level, Malaysia should support international efforts for the safe reopening of global trade routes,” he added.
A senior official from the government has since confirmed that they are monitoring the possible impact of the escalating Israel-Iran war, with a particular focus on global oil prices, during the Concorde Club meeting via Zoom yesterday.
The official added that direct effects of the war on Malaysians, such as inflation and cost of living were also being monitored.
