Petronas: Subsidy reform vital for energy transition, market stability
KUALA LUMPUR: The government's move to reform energy subsidies is crucial to ensure a sustainable and economically sound energy transition, said Petroliam Nasional Bhd (Petronas) president and group chief executive officer Tengku Tan Sri Muhammad Taufik.
He said the long-term implications of retaining subsidies that distort market dynamics and hamper genuine progress in addressing climate challenges.
He added that as part of the government's broader reforms involving price discovery, energy efficiency and subsidy management, it has become increasingly evident that subsidies are unsustainable and fail to support effective energy transitions.
Tengku Muhammad Taufik noted that the view, echoed by counterparts from across the region at the Energy Asia Global Leadership Executive (Eagle) forum, highlights how subsidies distort supply and demand dynamics.
"From the perspective of the government's move to rationalise subsidies, I will naturally defer to the official announcements, but we believe that the government is targeting how to do this (carefully) to make sure that those most at risk are least affected," he said at the Energy Asia 2025 press conference.
On carbon tax and the region's broader efforts to price carbon emissions, Tengku Taufik highlighted the growing consensus for a more harmonised and transparent approach to carbon pricing mechanisms.
Tengku Taufik also pointed to carbon capture and storage (CCS) solutions as a practical pathway for industries to mitigate emissions and manage carbon costs.
"Then you do either mitigation, which helps propagate a new revenue stream, potentially from people like Petronas, which is carbon capture and storage (CCS).
"You would avoid paying carbon taxes if you could be offered a sequestering solution, which is viable and cheaper.
"At the end of the day, you can see that the government is, much like its contemporaries in the region, fully cognisant of the impacts of climate change," he added.
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