I think about rising oil prices. I think about how it’s affecting the costs of almost everything.

I kid you not. In the first week after the US and Israel attacked Iran, the price of a lemon, yes, one piece of lemon was RM3.30 versus RM1.80 – RM2.50.  At first, I thought it was a mistake. Two weeks later, the price stayed at RM3.30. The lemons were from Egypt. Hmm. There are now news reports that there may be shortages in pharmaceutical supplies if the war continues. 

I know that lots of things have petrochemical bits in them. What I didn’t know was that petrochemicals from oil and natural gas enable the manufacture of over 6,000 everyday products and high-tech devices. 

‘Major petrochemicals – including ethylene, propylene, acetylene, benzene, and toluene, as well as natural gas constituents like methane, propane, and ethane – are the feedstock chemicals for the production of many of the items we use and depend on every day[1].’

Chemicals from petroleum refining and natural gas processing are used to make aspirin, antihistamine, antiseptics, bandages, cortisone, dentures, hearing aids, heart valves, and vitamin capsules. They are also used to make cell phones, refrigerants, fertilisers, lubricants, computer monitors, and packaging.

I use them when I apply lipstick, nail polish, hand lotion, and deodorant. Also, the clothes I wear. The toothbrush and toothpaste I use. There’s more… yes, balloons, plastic toys, golf bags, skateboards, motorcycle helmets, guitar strings, sunglasses, and footballs. 

So, when energy prices go up, in this case because of the act of war of two countries, the US and Israel – I, you, we, all of us, countries and the world – suffer the consequences of price increases, product shortages, lower disposal incomes and overall economic and social hardships. Not to mention, lives lost; families fractured; homes, hospitals and schools decimated; infrastructure like bridges and roads that take years and lots of money to build, destroyed; and a life of fear and uncertainty for many, many people who had and have no choice in this war.

At home, I’m still somewhat buffeted but…

The government’s subsidy programme, Budi95 allows the petrol price of RON95 to be kept at RM1.99 per litre for My Kard-bearing citizens, like me. While it helps cushion the impact of rising global oil prices, it costs the government a lot money.  

The monthly fuel subsidy bill has risen to a whopping RM3.2 billion from RM700 million previously. And, total fuel subsidies are projected to reach up to RM24 billion this year if higher oil prices persist. The amount is huge even without the scheme being extended to industries, companies, and foreigners. They have to pay market-linked petrol and diesel prices.

Naturally, there are concerns about the government’s fiscal agility to continue to grow and sustain the economy. As more money is channelled into costly fuel subsidies, it has less fiscal space for infrastructure development, digitization and AI, health care, education, and reforms.

Industries and companies are also hard hit. Higher oil prices mean higher transport and logistics costs. The price for moving and delivering goods by lorries and trucks, and re-routing and re-scheduling by ships, trains, and airlines have not only increased insurance premiums but also overall operating costs.

In manufacturing, energy intensive sectors like steel, cement, glove, and plastics and packaging are facing rising cost pressures due to elevated utility charges. Some manufacturers are contending with higher procurement costs as well as risks of cancelled orders and higher tariffs. 

In terms of medicines and medical supplies, although there are no immediate supply constraints, fuel costs, rerouted air shipments, and continued dependence on global manufacturing hubs are real issues. Also, ‘there might be vulnerabilities in specialised medical inputs — including helium used in MRI scanners, laparoscopic tools, and heliox in respiratory care. Helium is required to cool superconducting magnets in MRI scanners, without which the machines cannot function[2].’

In agriculture, shortages and higher fertiliser costs, and spiking diesel prices needed for machinery like tractors, harvesters and tillers for cultivation, and fishing boats are already resulting in consumers paying more for rice, fish, fruits, and vegetables. 

In hospitality and tourism, higher jet fuel, disruptions and postponements of flights and tours mean lower tourist arrivals and hotel occupancy rates. One recent repercussion of the Middle-East conflict was the cancellation of some 2,800 tours within a week. About 30 inbound travel agencies were impacted. Other than cancellations, the war has and is interrupting major transit hubs like Dubai and Doha, which connect Malaysia to Europe and the Americas.  2026 is Visit Malaysia Year. Hmm.

In people’s wallets, there is less money as inflation is looming. Utilities, food and daily provisions, laptops and mobiles, deliveries, and lemons cost more. The buck, unfortunately, slowly but surely, stops at consumers when costs of doing business surge.

The unwarranted war is straining governments, businesses, and everyday people, locally and the world over.

So how?