Malaysia's shrinking gas output threatens higher electricity prices and greater LNG reliance
Former economy minister Rafizi warns that declining domestic gas production will lift power costs and force more costly LNG imports.
In a recent episode of the Yang Berhenti Menteri podcast, former economy minister Rafizi warned that Malaysia’s electricity sector is confronting a national energy-security challenge as domestic gas production declines. He explained that the system, designed decades ago with abundant gas, now sees Tier-2 gas prices jump from about RM46 to RM70-RM80 per MMBtu after disruptions near the Strait of Hormuz, indicating insufficient supply for the roughly 800 million scf/day demand.
While the government has extended electricity-bill protection to 800 kWh per month, Rafizi said this does not solve the underlying issue, and continued reliance on coal clashes with the country’s 2050 net-zero pledge. Solar growth is hampered by land, storage and financing limits, and greater LNG imports will increase dollar-denominated outflows, pressure the ringgit, and erode energy sovereignty. He urged faster renewable deployment and a reassessment of the gas balance to avoid passing higher costs onto consumers.
Why it matters
Higher power prices and import dependence could hit Malaysian households, the economy and climate goals.
In this story
