Malaysia diversifies oil and fuel sources with strategic stockpiles to extend supply resilience beyond August 2026, says ministry
KUALA LUMPUR: Measures to diversify supply sources and assess the need for strategic stockpiles are essential to extend the country’s supply resilience beyond the current operational period, according to the Ministry of Economy.
The ministry said that, in this regard, the government’s contingency plan to ensure the continuity of oil supplies beyond August 2026 includes diversifying petroleum supply sources and optimising domestic fuel supplies through biodiesel.
The plan also includes efforts to strengthen leakage control, enforcement, and data-driven monitoring, the ministry said in a written reply published on the parliament website today. “The government wishes to clarify that Malaysia’s crude oil and petroleum product supplies are managed through a supply ecosystem involving various oil companies to ensure a continuous domestic supply,” it said.
The ministry was responding to a question from Senator Datuk Wira Koh Nai Kwong regarding the country’s long-term energy security plan, given that the nation’s fuel supply assurance has so far only been announced as sufficient until July 2026.
In addition, the Ministry of Economy stated that the government is comprehensively reviewing various models and approaches to strengthen the resilience of the country’s petroleum supply.
The ministry said this includes assessing fiscal implications, operational requirements, governance structures, and taking into account the experiences and best practices of other countries. “This assessment also considers the balance between the desired level of supply resilience, cost-effectiveness, and the suitability of these measures within the country’s market structure and capacity,” it said, responding to a question from Senator Dr. Lingeshwaran A/L R. Arunasalam.
The senator had requested the current capacity status of Malaysia’s Strategic Petroleum Reserve (SPR) for crude oil and refined petroleum products, as well as the duration of the country’s economic resilience.
Meanwhile, it said that the commitments and guarantees under the recently concluded 20-year long-term fuel supply agreement (covering petrol, diesel, crude oil, and gas) with the Russian Federation are aligned with the objectives of the National Energy Transition Roadmap (NETR). “The long-term supply assurance from Russia serves as a domestic safety net to minimise the risk of supply chain disruptions and volatility in global market prices resulting from geopolitical crises,” it added.
From the perspective of reducing dependence on fossil fuel imports, the government’s pragmatic foreign policy strategy, including simultaneous cooperation with Turkmenistan to secure access to gas field blocks, is aimed at diversifying supply sources. The ministry said this in response to a question from Senator Tuan Che Alias Hamid about the extent to which the expected energy supply agreement with Russia is consistent with the objectives of the NETR.
