Develop our own model for strategic fuel reserve, says analyst

 Oil and gas analyst Jamil Ghani proposes that key refiners, importers and distributors should be required to maintain minimum emergency stockholding requirements.

Malaysia currently does not have a national petroleum reserve, unlike Japan which has a strategic reserve of more than 400 million barrels.(EPA Images pic)

PETALING JAYA:

Malaysia should develop a strategic petroleum reserve tailored to its own energy needs instead of a wholesale adoption of models used by countries such as Japan or the US, says an analyst.

He said Malaysia could formalise a hybrid strategic reserve by retaining commercial inventories while establishing a smaller government-controlled emergency reserve with clear legal rules on when stocks can be released and replenished”.

Jamil Ghani.

Oil and gas analyst Jamil Ghani proposed that key refiners, importers and distributors should be required to maintain minimum emergency stockholding requirements. “This layered public-private model would strengthen resilience without duplicating existing infrastructure,” he said.

Separately, the Institute for Democracy and Economic Affairs called for a credible plan developed jointly with industry and international partners to determine the amount of petroleum stored, and who it is stored by. This plan would ensure that emergency stocks reflect Malaysia’s actual supply risks instead of arbitrary storage targets.

Prime Minister Anwar Ibrahim has said the government was studying the need for a national petroleum reserve following supply disruptions in the Strait of Hormuz earlier this year, despite assurances that domestic fuel supplies remain sufficient.

Malaysia currently does not have a formal strategic petroleum reserve as with Japan or the US and relies on commercial fuel inventories, domestic refining capacity and flexible imports to meet demand.

Samirul Ariff Othman.

According to the International Energy Agency, Japan’s emergency oil reserve system mainly consists of government-owned stocks, with a smaller stockholding obligation on the industry.

Economist Samirul Ariff Othman also said that the ultimate goal was to ensure Malaysia’s energy system could withstand future supply disruptions.

“Ultimately, energy security is not measured by how much oil a country produces, but by how resilient its entire energy system remains when confronted by external shocks,” he told FMT. - FMT