Extensive Rail Networks, Higher Renewable Capacity Can Cushion Malaysia Against Oil Shocks -- Tengku Muhammad Fa-iz Petra
KUALA LUMPUR, Sept 24 (Bernama) -- Building comprehensive rail networks and increasing utility-scale renewable capacity could be a long-term solution to reduce Malaysia’s exposure to external energy shocks, according to Dr Tengku Muhammad Fa-Iz Petra ibni Almarhum Sultan Ismail Petra.
He said the measures would require considerable public expenditure, but this has to be balanced against the Treasury's projection that Malaysia's subsidy bill would be about RM58.4 billion under the current oil shock.
“The current situation in West Asia has revealed that our nation remains exposed to external energy shocks. A possible long-term solution would be to build comprehensive rail networks and increase utility-scale renewable capacity,” he said in his talk on “Situation in West Asia: What It Means for Malaysia and the Global Economy” at the Institute of Diplomacy and Foreign Relations’ (IDFR) Distinguished Lecture Series here today.
Tengku Muhammad Fa-Iz Petra said Malaysia had been more successful in diversifying the supply side of energy than in the final demand side, largely because of the country’s heavy energy use for transport and heavy reliance on private transport.
Quoting the Transport Ministry, he said the country’s public transport modal share is around 20 per cent, meaning the remaining 80 per cent still relies on private vehicle.
“These private vehicles are mainly powered by petrol, even as electric vehicles (EVs) are becoming more ascendant. In 2025, 81 per cent of cars sold in Malaysia were still petrol-powered,” he noted.
He said about 40 per cent of Malaysia’s crude oil is supplied by countries whose shipments must pass through the Strait of Hormuz.
“It is important to note that the risk of sudden energy supply shocks in this part of the world was not lost on previous Malaysian administrations.
“Several policies were crafted to reduce our country’s vulnerability, including the 1981 four-fuel diversification policy and the 2001 five-fuel diversification policy. It was hoped that by diversifying the type or source, alternatives could compensate for shortages during supply disruptions,” he said.
He said Malaysia has diversified its energy supply over the years, but it has mainly taken the form of increased reliance on natural gas and coal rather than renewables, despite policies to promote the latter since 2006.
Tengku Muhammad Fa-Iz Petra further said that the true economic impact of the West Asia situation would depend on how long the current calm lasted, whether shipping through the Strait of Hormuz returned to pre-conflict levels and the prospects for durable peace in the region.
-- BERNAMA