Malaysia reviews strategic petroleum reserves and diversifies supply sources to extend fuel resilience beyond current two-month operational period.
KUALA LUMPUR: Measures to diversify supply sources and assess strategic stockpiling needs are crucial for extending the resilience of the country’s petroleum supply beyond the current operational period, according to the Ministry of Economy.
The ministry noted that the country’s current operational supply resilience relies on existing stocks within the commercial supply chain, with operational stocks at the retail and petrol station levels lasting around three days, while the rolling stock commitment by trading companies for crude oil supply covers around two months.
“This period reflects the just-in-time inventory management practices currently in place and serves as one of the main foundations for the government’s need to review petroleum reserve stocks to ensure the country’s supply security,” it said.
In this regard, the government’s contingency plan to ensure the continuity of oil supply beyond August 2026 is through the diversification of petroleum supply sources and optimising domestic fuel supply through biodiesel.
The plan also includes efforts to strengthen leak control, enforcement, and data-driven monitoring, the ministry said in a written response published on the Parliament’s website today.
“The government wishes to clarify that the supply of crude oil and petroleum products in Malaysia is managed through a supply ecosystem involving various oil companies to ensure a continuous domestic supply,” it said.
In relation to the Strategic Petroleum Reserve (SPR), the government is thoroughly examining various models and approaches to strengthen the resilience of the country’s petroleum supply.
“This includes assessing fiscal implications, operational needs, governance structure, as well as considering the experiences and best practices of other countries.
“This assessment also takes into account the balance between the level of supply resilience to be achieved, cost-effectiveness, and alignment with the market structure and the country’s capacity,” it noted.
The ministry said this when responding to a question from Senator Dr Lingeshwaran A/L R. Arunasalam, who wanted to know the status of the SPR’s capacity and the long-term plan to expand the strategic storage infrastructure.
The Ministry of Economy also responded to Senator Datuk Wira Koh Nai Kwong’s question regarding the long-term energy assurance plan, considering that the national fuel supply guarantee announced so far is only sufficient until July 2026.
Meanwhile, the ministry stated that the commitments and guarantees of the 20-year long-term fuel supply agreement (petrol, diesel, crude oil, and gas) recently reached with Russia are in line with, complementary to, and not in conflict with the targets of the National Energy Transition Roadmap (NETR).
“The long-term supply guarantee from Russia acts as a domestic safety net to minimise the risk of supply chain disruptions and global market price volatility due to 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 for access to gas well blocks, is actually aimed at diversifying sources.
The ministry said this in response to Senator Tuan Che Alias Hamid’s question regarding the extent to which the energy supply agreement with Russia, which is set to be signed, aligns with the NETR targets.
