SINGAPORE – Malaysia’s opposition Pakatan Harapan (PH) coalition has won the country’s 14th general election, gaining a majority of seats in the federal parliament and increasing the number of state assemblies it controls from two to six, out of a possible 13.
According to Wood Mackenzie, the result could have a major impact on Malaysia’s oil and gas sector linked to changes in the country's wider economic policy.
The coalition made various promises that will almost certainly affect Petronas, the analyst added.
One was a pledge to abolish the Goods and Services Tax, introduced by the former government in part to reduce dependence on revenues from Petronas at a time when global crude oil prices had collapsed.
Other pledges included targeted oil subsidies and the formation of a special committee to check the implementation of the Malaysia Agreement 1963: this outlines the state’s oil and gas rights including the collection of export tax on crude petroleum, oil royalties and ownership of oil fields.
Wood Mackenzie said the new government would need to act quickly to establish confidence and stability in its ability to manage the economy, to calm financial markets, and to provide clarity on how it intends to address some of its campaign pledges.
The change could affect future investments and exploration, and give Petronas less autonomy.