KUALA LUMPUR, April 21 — The federal government has incorporated lower global oil price into its expected deficit this year but will “reprioritise” its planned spending if the commodity declines further in value, said Datuk Seri Tengku Zafrul Tengku Abdul Aziz.
Oil price fell sharply on the international market after Saudi Arabia and Russia triggered a price war that came just ahead of the world-stopping coronavirus disease (Covid-19) pandemic.
The finance minister acknowledged the matter in his statement today, but sought to assure Malaysians that the government was prepared to adapt.
“The general preoccupation with oil is understandable, given that it is closely linked to global geopolitical influences. However, what is more important is to recognise how Malaysia has a diversified economic base.
“Moving forward, MOF will also be looking at structural reforms to ensure better diversification in Malaysia’s economy, apart from undertaking the necessary fiscal and monetary policies to develop the nation’s economic resiliency,” he said, referring to the Finance Ministry.
Panic over oil prices were exacerbated by news reports about the price of oil on the US futures market closing at negative US$37.63 (RM165) a barrel yesterday due to non-existent demand and insufficient storage.
However, the anomaly was limited to futures contracts expiring in May and not indicative of current trading prices.
The price of Brent Crude that Malaysia uses as its benchmark is currently hovering around US$21.