Malaysia warns global energy crisis could push up inflation via supply chain costs despite strong early 2026 economic indicators
PUTRAJAYA: Economy Minister Akmal Nasrullah Mohd Nasir has warned that the global energy crisis could drive up the cost of living through increased logistics, insurance and production input costs.
He said that inflation rose to 1.7% in March from 1.4% in February. However, he emphasised that the primary concern is no longer limited to fuel prices alone, as inflationary pressure has begun to permeate the broader supply chain.
Akmal stated that the government is closely monitoring risks such as higher fertiliser costs, imported production inputs and disruptions to freight and insurance, all of which could eventually impact consumer prices.
“Inflationary factors also involve the goods being used; once input costs are affected, the impact becomes much broader,” he told reporters following the Economy Ministry’s monthly assembly at the Putrajaya International Convention Centre today.
He added that while the full effect may not be felt immediately due to existing inventories and buffers, the government cannot afford to be complacent, as prolonged disruptions would leave a significant economic footprint.
Despite these challenges, Akmal said that Malaysia entered 2026 on a relatively strong footing.
Early estimates for the first quarter show: economic growth (5.3%), unemployment (2.9%) and exports RM130 billion (a 10.8% increase).
As part of the strategy to mitigate further inflation, the government is advocating for a practical approach to biodiesel usage.
This includes efforts to raise the national blend from B10 to B15 by focusing on operational adjustments rather than awaiting major infrastructure expansion.
B10 and B15 refer to diesel blends containing 10% and 15% palm-based biodiesel, respectively, with the remainder consisting of conventional petroleum diesel.
Akmal stated that operational updates at depots and fuel facilities could accelerate implementation, noting that the domestic supply of palm-based biodiesel is currently sufficient to support the transition.
“We do possess better resilience compared to many other regions. However, if we become too complacent, it may undermine the strengths we have already built,” he cautioned.
