PETROLIAM Nasional Berhad (Petronas) will determine whether Sabah and Sarawak can play a more strategic role in Malaysia’s domestic diesel supply chain, including supporting industrial demand in Peninsular Malaysia if required, Deputy Prime Minister II Datuk Seri Fadillah Yusof said.
Fadillah, who is also Minister of Energy Transition and Water Transformation, stressed that petroleum production and distribution, including diesel, fall under Petronas as the principal regulator of the sector, with additional support from companies such as Shell and Petron in the fuel market.
"From the standpoint of regulatory capacity, it lies under Petronas. What is important at present is to ensure sufficient supply and, based on their assurances, supply is available.
"So we must engage with Petronas if there is a need for Sarawak and Sabah (to assist) in maintaining this domestic diesel supply chain," he said when met after attending an Aidilfitri event in Semariang Batu on Saturday.
His remarks come as Putrajaya weighs contingencies against potential supply disruptions, amid concerns over global energy volatility.
Fadillah said the government remains cautious in anticipating any domestic shortages, warning that Malaysia may need to source fuel from the Asia-Pacific region or other markets at significantly higher cost if supply tightens.
"This is because global prices could rise to US$110 (RM443.41) per barrel or higher, compounded by logistics costs to bring in supply into the country," he said.
On regional energy capacity, he noted that Sarawak is in a relatively strong position due to its shift towards renewable energy, with approximately 60 per cent of its power generation derived from hydropower, supplemented by solar, gas and coal.
However, Sabah continues to face greater challenges, as it remains heavily reliant on diesel for power generation.
"This situation creates pressure when diesel prices rise and supply tightens, while energy generation remains critical for domestic use as well as the industrial sector," he said.
Fadillah added that Peninsular Malaysia relies more heavily on gas and coal, with relatively stable supply, but cautioned that its dependence on gas also requires careful management to ensure long-term energy security. - April 5, 2026
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