Attack on Saudi Arabia’s largest oil reserves is going to affect supply in Malaysia soon but the impact might not have a bearing on the customer.
According to Prime Minister Tun Dr.Mahathir Mohamad, “In Malaysia, the government will continue to practice intervention through a subsidy to offset the price hikes. So while Saudi Arabia had to stop refined oil production by one million barrels (per day), it will definitely impact the global oil prices, but this will not affect the market prices in Malaysia.”
Saudi Arabia is reported to have temporarily suspended production at the state-owned Aramco’s two major oil facilities. This happened post-Houthi led drone attacks and its impact is already being felt in the global oil prices.
“In Malaysia, when there is an oil price hike, we will give a subsidy. Unlike in the United Kingdom, if the price of oil soars, the government will raise the tax and the people don’t complain,” he said at a special press conference after watching the Putrajaya Boat Race 2019.
On the thought of whether the government would review the retail price of RON95 petrol, which currently stood at RM2.08, if the global oil prices soar following the attacks, the PM did not immediately comment. It has been reported that Houthi militia had a plan for a 10 drone attack on the Saudi oil reserves. Last Saturday, strikes on key Saudi Arabian oil facilities took off. Apparently, the US is pinning the blame on Iran for the attacks. The subsequent fires have caused a loss of about 50 percent of the kingdom’s oil output or 5 percent of the global supply.