Malaysian Prime Minister Datuk Seri Anwar Ibrahim has attributed the recent domestic fuel price increases to surging insurance premiums and logistics costs resulting from the ongoing Middle East conflict.
Pengerang Refining Costs Rise as Hormuz Conflict Disrupts Global Oil Shipping
Speaking at the Ministry of Transport‘s monthly assembly on April 9, 2026, Anwar clarified that the price hikes are not caused by supply shortages, as fuel shipments to the country remain consistent.
“The cost of the older oil stocks purchased before the war, which were stuck in the Strait of Hormuz and are now moving to Pengerang, has increased. Because insurance costs have exceeded 100 per cent, the transport costs and shipping charges have also risen,” Anwar explained.
“This means the oil, which was originally supposed to be low-cost for processing in Pengerang, has now seen its costs escalate,” he added.
The Prime Minister highlighted Malaysia’s proactive development efforts as a critical factor in mitigating the impact of the regional crisis on the national economy. Following high-level discussions between Anwar and Iranian President Masoud Pezeshkian on March 26, seven Malaysian-owned vessels, including Petronas tankers, were granted safe passage through the Strait of Hormuz. This narrow waterway, which facilitates the passage of 20 per cent of the world’s crude oil and gas, has seen traffic disrupted since February 28 due to military actions conducted by the United States, Israel, and Iran itself.
“In my discussion with the President of Iran (Masoud Pezeshkian), when I mentioned the Malaysian vessels, including Petronas ships, he gave his assurance that he would issue instructions to ensure everything necessary is done to allow our ships to pass through the Strait of Hormuz immediately,” Anwar said.
Despite Malaysia not being directly involved in the armed conflict, Anwar warned that the geopolitical violence is causing a ripple effect across the global economy. Quoting the Emir of Watar, Sheikh Tamim bin Hamad Al Thani, Anwar noted that the energy sector faces a long recovery period.
“At least three years are required to carry out some repairs so that gas operations can be conducted, and perhaps three to five years to reach full performance,” the Prime Minister concluded.
