KUALA LUMPUR, April 28 — Malaysia’s electricity supply remains stable, but rising and volatile global fuel prices could push up generation costs and eventually affect tariffs if pressures persist, Economy Minister Akmal Nasrullah Mohd Nasir said today.

He said the main risk is not from power shortages, but the impact of fluctuating coal and gas prices on electricity production costs.

“When fuel costs such as coal and gas rise, the cost of generating electricity increases accordingly. Ultimately, this pressure may affect electricity tariffs for consumers if it is not managed carefully,” he said in an online briefing on the global supply crisis today. 

As of April 25, Akmal said Malaysia’s electricity generation mix remains heavily dependent on coal at 54 per cent and gas at 40 per cent, leaving the system significantly exposed to movements in global energy markets.

He added that coal imports in the first quarter of 2026 totalled 7.94 million metric tonnes, with full-year requirements projected at 35.99 million metric tonnes. 

“The Energy Commission is closely monitoring stock levels at power plants to ensure minimum supply requirements are consistently maintained,” he said.

For gas, Akmal said the average consumption for electricity generation in the first quarter stood at around 1,011 million standard cubic feet per day, largely supplied from domestic sources in Kerteh. 

However, he said the share of gas in the generation mix is expected to decline in July and August due to scheduled maintenance that will temporarily reduce supply to the power sector.

“In this context, the national electricity system must maintain flexibility to utilise alternative fuel sources to ensure continued stability of supply. At the same time, electricity demand is rising,” he said.

Between April 20 and 25, he said the average peak demand increased by 1.9 per cent to 20,640 megawatt (MW), compared with 20,257 MW the previous week. 

He said a new peak of 21,468 MW was also recorded on April 23, surpassing the previous high of 21,276 MW.

“This increase has been largely driven by hot weather, which has led to higher use of air conditioning in homes, businesses and workplaces. 

“As previously stated, there is a lagging effect in electricity supply, whereby the impact of rising fuel prices is only felt around two months after the initial shock,” he said. 

Akmal then went on to say that for May 2026, the cost of electricity generation is projected to rise, driven by coal prices increasing to RM21.28 per million British Thermal Unit (BTU), compared with the base price of RM19.14 per million BTU.

He then said that the government has given assurances that measures are in place to mitigate the impact on consumers, with around 7.5 million domestic users, or 85 per cent of households consuming below 600 kWh, continuing to be fully exempted from the Automatic Fuel Adjustment charge.

He urged consumers to adopt energy-saving practices, including moderating air-conditioning use, switching off unused appliances, and reducing consumption during peak hours to help ease demand and stabilise generation costs.

SINGAPORE: While the surge in the price of jet fuel has caused air ticket prices to soar, Asian airlines are reporting an increased demand as flyers are now choosing to transit through Asia rather than countries in the Middle East.

The increase in jet fuel prices has resulted from the war in the Middle East, which began on Feb 28 when the United States and Israel started to bomb Iran. Iran has all but closed the Strait of Hormuz, a key chokepoint through which around 20% of the world’s energy supply passes, leaving many countries scrambling for fuel.

Wary of getting close to conflict areas, of cancelled or affected flights, many travellers are looking to routes considered to be safer. Singapore Airlines, Cathay Pacific, Korean Air, and even Qantas Airways have reported strong ticket sales in March.

Reuters quoted Cathay Chief Customer and Commercial Officer Lavinia Lau as saying on April 17, “We have … mounted additional flights and capacity to Europe in March and April to cater for an upsurge in market demand as passengers prioritised alternative routings.”

Singapore Airlines saw the sharpest gain among all regions last month in terms of the percentage of seats filled. For its flights to Europe, SIA had 93.5% seats filled, an increase from 79.7% at the same time last year, saying in a statement that “capacity through Middle East air hubs was affected by the ongoing Middle East conflict.”

Both Cathay Pacific and Singapore Airlines have announced that it added flights to Europe amid the uptick in demand.

Korean Air, meanwhile, saw its operating income increase by 47.3% to 517 billion won (approximately S$446.6 million), due to “increased demand between Europe and Asia due to the Middle East war.” The airlines’ European passenger revenue is now up by nearly one-fifth from March 2025.

Whether travel demand across Asia will be strong will be tested in May and July, during the summer school holidays for India and China, respectively, reported the South China Morning Post. It quoted an industry expert as saying, “Both will be watched closely as barometers of the strength, or otherwise, of regional travel.”

Transit hubs in the Gulf

Transit hubs in the Gulf, such as Dubai International Airport, Hamad International Airport in Doha, and Zayed International Airport in Abu Dhabi, have all been affected by the conflict, which quickly spread to various countries in the region.

However, Emirates, Qatar Airways, and Etihad Airways have been restoring capacity in the past weeks, and are now at 60% of pre-February 28 flights. /TISG

Read also: SIA, Scoot yet to impose fuel surcharges even as global airlines move to raise fares

This article (Airlines in Asia see higher demand as travellers reroute from Gulf hubs) first appeared on The Independent Singapore News.

JAKARTA: As the price of crude oil has surged amid the war in the Middle East, most countries in Southeast Asia have seen pump prices go up as fuel supplies have gone down.

Indonesia, however, is proving to be an exception in the region, choosing to allocate billions in subsidies to keep the price of fuel at pre-war rates.

While this decision has allowed Indonesians to live undisrupted lives, Indonesia may pay for it dearly later on.

Pre-Iran war prices

The conflict in the Middle East, which started on Feb 28 when the United States and Israel began bombing Iran, has resulted in all but closing the Strait of Hormuz, through which a fifth of the world’s fuel supply passes. Since much of this supply is headed to Asia, countries on the continent have been disproportionately affected, grappling with crude oil that has gotten 50% to 65% more expensive since the war began, as well as scrambling to ensure they have enough supply for domestic needs.

In country after country in Southeast Asia, including Singapore, pump prices have gone up, and countries with fewer resources have suffered the most. In the Philippines, the price of diesel has gone up by as much as 81.6%, in Cambodia by 78.7%, and in Myanmar by 76.9%, for example. In countries such as Malaysia and Brunei, some fuels have gone up in price, while others have remained subsidised.

In Indonesia, however, the situation is very different.

“Amid the economic fallout from the Iran war, Indonesia has managed what most countries have struggled to do: keep domestic fuel prices steady during one of the worst oil shocks in years. Subsidised petrol (mid-grade, RON 90) remains capped at US$0.60 (S$0.76) per litre, while subsidised diesel (a blend of fossil fuel and palm oil-based biodiesel) stays at US$0.40 (S$0.50), even as Brent crude surpasses US$118 (S$150),” the Lowy Institute wrote on April 7.

The Indonesian government has taken upon itself to absorb fuel price shocks instead of passing this on to its citizens, announcing that it has no intention to raise prices, at least in the short term. 

What enabled Indonesia to do this is large direct subsidies, in addition to compensation to state companies. The government allocated IDR 381.3 trillion (S$28.58 billion) for this purpose, paying companies such as Pertamina to sell fuel below market price.

As a result, Indonesian households are able to maintain their purchasing power as prices remain stable. Inflation is kept low, the cost of living stays the same, economic shock is avoided, and perhaps most importantly, political stability is maintained.

This strategy of intervention is not new, and Indonesia has resorted to subsidies time and again when oil prices have risen. And with good reason, given that major price hikes in recent history, including as recently as 2022, resulted in protests and unrest that led to political backlash.

The risks of not raising fuel prices

Should the war in the Middle East be prolonged, however, and Indonesia continues to subsidise fuel, there are long-term risks down the road, including a fiscal deficit that could exceed the legal cap of 3% of the country’s GDP.

Allocating a significant amount could also mean less money for infrastructure, healthcare, and education.

Additionally, should the rupiah weaken, this would mean higher import costs and an even bigger subsidy bill. Analysts have already sounded the warning bell that prolonged subsidies could strain public finances. /TISG

Read also: Up to S$380 billion in losses, 9 million at risk of poverty as war hits Asia-Pacific

This article (Indonesia refuses to raise fuel prices but could pay the price later on) first appeared on The Independent Singapore News.