GST implementation will cushion impact of plunging oil prices

He said the government was well prepared to handle a situation where oil prices dip below US$70 per barrel. Yesterday, global crude oil prices dropped to RM240 (US$69) per barrel.

"It will benefit our country as it will trigger other sectors such as tourism and financials to grow while the export segment will be more competitive," said Idris, who is also Performance Management and Delivery Unit (Pemandu) CEO.

Speaking during a question and answer session at the 6th Young Corporate Malaysian Summit here today, he said low oil prices may have caused public panic.

"But looking from a different perspective, the impact is, no more subsidies for oils, and revenue will be less but it would be complemented by the savings derived from reducing or withdrawing subsidies all together," he said.

He also noted that in line with making Malaysia a hub for oilfield services and equipment in 2020, the industry should boost its downstream and upstream activities.

Meanwhile, Shell Malaysia Chairman Iain Lo said the Malaysian oil and gas (O&G) market has grown over time, however, it was not considered as a matured market as expertise and services were still imported," Lo said.

On outlook, he said Malaysia remained an attractive destination due to its stable fiscal regime.

"It becomes the source of attractiveness, it is more stable unlike certain countries where companies get smacked with new taxes if they think the company has gained a lot," Lo said.