PUTRAJAYA: Malaysians should prepare for a painful ripple effect from the Middle East conflict, with Prime Minister Datuk Seri Anwar Ibrahim warning that skyrocketing freight charges and impending fertiliser shortages will inevitably drive up the cost of living.
Issuing a stark warning regarding the nation’s agricultural sector, Anwar noted that Malaysia’s heavy reliance on imported fertilisers leaves it highly vulnerable to global supply chain shocks.
“I went to Felda in Pengerang on Sunday. For this month, prices have not increased significantly, but fertiliser prices will shoot up because our percentage of imported fertiliser is too high,” he warned.
Addressing civil servants at the Transport Ministry’s monthly assembly yesterday, Anwar said the skyrocketing costs of global logistics caused by the ongoing US-Iran conflict and regional instability are already being felt.
While Malaysian vessels remain safe due to the country’s friendly diplomatic ties, he said the cost of international trade has surged.
“Insurance costs have surpassed 100% and freight charges have also gone up. This means the oil that was supposed to be cheap to process in Pengerang has now seen its costs rise,” he explained.
Anwar added that disruptions to global energy supplies will be a long-term issue, citing his recent conversation with the Emir of Qatar.
“Even if the war ends tomorrow, according to the Emir of Qatar who told me directly, it will take a minimum of three years to undertake minor repairs to allow gas operations to operate, and probably three to five years for complete performance,” he said.
Given the grim global outlook, Anwar said the government had no choice but to make tough, unpopular decisions such as rationalising fuel subsidies to build up the nation’s financial resilience.
“The strength of our economy in recent years helps because we have built up our reserves and taken steps like rationalising subsidies before the crisis hit,” he said.
Anwar acknowledged the public’s frustration over the rising cost of living and the recent diesel subsidy rationalisation, sharing a personal anecdote to show he understands the ground sentiment.
“My son-in-law drives a diesel car and he was making noise too. He asked, ‘Why didn’t you tell us earlier?’
“I know there are those facing difficulties. I could approve blanket subsidies to make everyone happy temporarily. But after that, everyone will bear the burden. We cannot do that. Leadership and policies must consider current and future challenges,” he said.
Given these prolonged disruptions, Anwar urged civil servants to be proactive in explaining the reality of the geopolitical crisis and government policies to the public.
“Do not wait until there is a problem to be shocked. Our duty is to explain that we must be smart in handling this issue,” he said.From April 9 to 15, the price for unsubsidised RON95 costs RM4.27 per litre (up 40 sen from RM3.87), while RON97 is priced at RM5.35 per litre (up 40 sen from RM4.95).
Meanwhile, diesel prices in Peninsular Malaysia has risen to RM6.72 per litre, up 70 sen from RM6.02 previously.
The Strait of Hormuz has become a major flashpoint following the outbreak of the Middle East conflict in late February, which saw US and Israeli forces launch massive strikes targeting Iranian leadership and military infrastructure.
While the United States and Iran recently agreed to a tentative two-week ceasefire starting April 7, the regional situation remains highly volatile, with the conflict spilling over into Lebanon.
