KUALA LUMPUR, Jan 8 — The government has a contingency plan in place to ensure affordable petrol prices in the event that the rising tensions between the United States and Iran escalates into open warfare.

Finance Minister Lim Guan Eng told a press conference today that there was a contingency plan in the event that the US-China trade war escalated and that such a plan can also be adopted for the US-Iran situation.

“Oh definitely, we have a contingency plan (if the trade war worsens), so definitely we have a contingency (for that scenario) and we can adopt it.

“The biggest problem or challenge facing us is to maintain economic growth. We are still a net oil exporter. So, look at the impact of oil price hike, it will be on economic growth, we want to maintain it,” said Lim.

At the same time, he pointed out that the situation in the Middle East is still ongoing and there is a possibility that the tension will fizzle out.

Yesterday, Iran launched a dozen missile strikes against two US air bases in Iraq. This was in retaliation to the US air strike which killed senior Iranian military commander Qassem Soleimani last week.

When asked if the oil price hike due to the tensions in the Middle East will benefit the government, Lim then explained that for every oil price increase by US$1, Petronas will benefit by RM300 million or more.

“The government won’t benefit. The government will have to pay higher petrol subsidies. But of course, we are ready.

“However, many said that this hike in oil price cannot be sustained. So far, the US has not retaliated. So, if the conflict ends there, the oil price will go back to its pre-conflict days.

“It’s (the situation) is a day to day development but so far, the country can manage,” said Lim adding that the government had already allocated RM7 billion for this year’s petrol subsidy budget.

He said the matter was also discussed in today’s Cabinet meeting.

Putrajaya’s main concern is how the rising tensions will affect global economic growth, but Lim acknowledged that it is still too early to tell.

In the meantime, Lim gave his assurance that the government can and will manage under the current situation, voicing his hope that both Iran and the US will not go to war with one another.

https://www.malaymail.com/news/malaysia/2020/01/08/finance-minister-fuel-price-contingency-plan-ready-following-escalating-con/1825892