The Malaysian gas industry provides many benefits for the country. The industry contributes to Malaysia’s overall socio-economic well-being through the creation of jobs, supporting the domestic economy as well as boosting government revenue through the payment of taxes and royalties. The oil and gas industry as a whole figures prominently in our nation’s economy, having contributed fully one-fifth of its GDP over the past decade. On a standalone basis, the Malaysian gas industry produced and sold into the local market gas valued at over RM 10 billion in 2017.

Every year, the Malaysian gas industry pays billions of dollars in various taxes to the government. Another way that the government – and Malaysians – benefit from the industry is through royalties. A royalty is the share that the government receives from companies producing gas in the country. Taxes and royalties help pay for important government services, such as education, healthcare, infrastructure and social programs that benefit everyone in Malaysia.

Owing to its overwhelmingly localized complete end-to-end value chain, the Malaysian gas industry generates strong multiplier effects for the domestic economy. This is because the industry generates business activity across a spectrum of support industries and supplier networks. In addition, the jobs within the industry and many more in the broader economy would not exist without economic activity generated by the industry. Similarly, the wages paid to industry employees have an effect on the broader economy as employees use their wages to purchase goods and services. Thus, for every ringgit that is spent domestically on gas, several more are generated in the economy, with the net effect being the industry’s contribution to the country’s GDP amounts to several times more than its face value.

Strong Foreign Exxhange Earner

The Malaysian gas industry also improves Malaysia’s balance of payments position as the lion’s share of gas in sold into the local market is from domestic sources. Malaysia is currently the third largest LNG exporter in the world, exceeded only by Qatar and Australia. In 2017, it exported 26.71 million tonnes of LNG and in the process earning RM 40.46 billion in valuable foreign exchange for the country. Malaysia through PETRONAS has reliably delivered over 10,000 LNG cargoes over 30 years, supplying to long term buyers in Asia as well as meeting demand all across the world. Additionally, some of the companies involved in the industry have begun spreading their wings abroad, earning valuable foreign exchange and further strengthening of our country’s economy in the process.