Green electricity costs have dropped by 90%—yet natural gas demand is still rising? What is natural gas’s true role?

In May this year, Petronas announced a new large-scale liquefied natural gas (LNG) project. Its executives explicitly stated in an interview with Reuters: “Natural gas will remain a very, very important part of the energy mix for the next 30 years.” Against the global backdrop of persistent calls to phase out fossil fuels, an Asian energy giant is betting real money on natural gas’s long-term future. This is not an isolated case. Whether natural gas serves as a ‘bridge’ in the energy transition—or as the foundational ‘base’ of the ultimate energy system—is a debate now reigniting worldwide. The question of whether natural gas is a transitional fuel or a primary future energy source has long been contested within the industry. For an extended period, natural gas has been viewed as a critical transitional fuel—a bridge linking fossil fuels and new energy sources. However, this view has been quietly shifting in recent years. At the Sixth China LNG Conference, multiple experts argued that natural gas is not merely transitional, nor is its growth ephemeral. Instead, amid the three-way interplay of expanding energy consumption, geopolitical dynamics, and green transition, natural gas is moving toward the core of the future energy structure—and will continue playing a pivotal role beyond 2050. From ‘transitional’ to ‘primary’: what drives this shift—and how will it reshape our imagination and realization of the future? This debate compels us to reflect: in the complex chess game of energy transition, how do we balance idealism and realism, short-term and long-term goals, feasibility and controllability? Where does the ‘primary vs. transitional’ divide lie? In discussions about natural gas’s role, the metaphors ‘bridge’ and ‘base’ appear most frequently. Their popularity is no coincidence—they both capture natural gas’s precarious, dual-positioned status in the energy transition. Yet they imply fundamentally different functions. The ‘bridge’ addresses a means-to-an-end problem: replacing high-carbon energy while buying time for low-carbon alternatives to scale up. It is not an end in itself—and is expected to be phased out or drastically reduced. In contrast, the ‘base’ implies the most stable, reliable layer of the energy system—even amid booming wind and solar generation, it remains indispensable for backup and grid stability. These two roles correspond to distinct time horizons. The ‘bridge’ logic reflects short-cycle thinking: natural gas is merely a temporary tool bridging high-carbon and zero-carbon energy—and will gradually exit thereafter. The ‘base’ logic embodies long-cycle thinking: even in a carbon-neutral era, natural gas must still fulfill irreplaceable functions such as flexible peak-load regulation and emergency reserve support. Forecasts from the International Energy Agency (IEA) illustrate how such assessments evolve with time and changing realities. In its latest World Energy Outlook released in 2025, the IEA abandoned its earlier projection that global oil demand would peak—or plateau—by 2030, instead noting that demand for both oil and natural gas may continue rising through 2050. ‘Transitional’—or just ‘settling’? European perspectives on energy trends The notion of natural gas as a ‘transitional fuel’ originated primarily in Europe, where aggressive energy transition policies assume societies can rapidly shift to a renewables-dominated energy system. Oil consumption is falling sharply; as another fossil fuel, natural gas appears destined to follow suit.

Petronas has announced a fuel price hike—what impacts will this bring?

The Malaysian government recently announced another round of retail fuel price increases and indicated its intention to gradually reduce fuel subsidies, aiming to alleviate mounting fiscal pressure caused by persistently high international oil prices. Malaysian officials stated that the government will continue providing fuel subsidies—but at a level deemed fiscally sustainable. Market observers noted that while the government will not eliminate subsidies entirely, it also has no plans to keep increasing them indefinitely. Given the ongoing upward trend in global oil prices, “the era of enjoying cheap fuel is over.” Repeated fuel price hikes intensify public perception of rising living costs. On the evening of July 30, the Prime Minister’s Department announced that, effective July 31, the price of RON97 gasoline would rise by RM0.10 per liter to RM1.62 (approx. RMB3.564), diesel would increase by RM0.20 per liter to RM1.28 (RMB2.816), and liquefied petroleum gas (LPG) would rise by RM0.05 per kilogram to RM1.45 (RMB3.19). This marks less than three months since the previous hike. According to media reports, this is the second gasoline price increase within two months—and the third diesel price hike in four months. In terms of magnitude, diesel saw the largest increase, while LPG experienced the smallest—mirroring the pricing adjustment pattern introduced on May 5: diesel again bore the heaviest upward adjustment. Although diesel prices rose significantly, the government simultaneously increased subsidies for fishing-diesel from RM0.441 to RM0.641 per liter—an additional RM0.20 subsidy. After three major adjustments, the price gap between subsidized fishing-diesel and land-transport diesel has narrowed to just RM0.08—essentially converging. However, the gap with Thai diesel remains RM0.54 per liter. Local commentators suggest cross-border diesel smuggling along the Malaysia–Thailand border may persist. According to information gathered by reporters, without government subsidies, market prices for gasoline, diesel, and LPG in Peninsular Malaysia (West Malaysia) would stand at RM2.45/liter, RM2.07/liter, and RM2.39/kg respectively. Currently, the government exempts RM0.5862 per liter in sales tax on gasoline and provides RM0.2420 in direct subsidy; for diesel, it offers RM0.5913 in subsidy plus RM0.1964 in sales tax exemption; and for LPG, it provides RM0.9392 per kilogram in subsidy. Thanks to these subsidies, Malaysia’s fuel prices rank among the lowest in ASEAN—second only to Brunei. Market analysts observe that since October 2001, gasoline and other petroleum products have undergone eight rounds of price hikes—“consumers are completely defenseless.” Rising fuel prices inevitably trigger broader inflation, already imposing tangible cost-of-living pressures on the public. Local media commentary notes that fuel price hikes will inevitably amplify inflationary pressures—ultimately increasing economic burdens on the general consumer. Amid this wave of fuel price increases, heavy transport operators, public bus and taxi services, and school bus providers are already considering fare hikes. Passengers are expected to face higher transportation costs, while service providers confront mounting operational expenses and potential passenger declines.

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