PETALING JAYA, Jan 10 — The sharp decline in global oil price could cost Petronas billions in revenue and dent the income the government derives from the state oil firm, Youth and Sports Minister Khairy Jamaluddin said today.

The Cabinet minister’s remarks differ from his colleagues who have repeatedly insisted that Malaysia is shielded from the oil price that have fallen to US$50 (RM175) a barrel, the lowest since 2009.

“The tumbling of oil prices... it is good for us because petrol is cheap but at the same time it is a big strain on government revenue,” he said after launching the Asia Leadership Conference 2015 at Sunway University here.

Analysts have warned that Malaysia risks a credit rating downgrade if it misses its target of cutting its chronic budget deficit to 3 per cent of the economy.

Falling oil price has already pummelled the local currency and government bonds as investors withdraw funds due to a gloomy outlook for the Malaysian economy this year.

Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar previously insisted declining oil price would not harm Malaysia’s growth or deficit reduction targets.

Deputy Finance Minister Datuk Chua Tee Yong said the government will not revise Budget 2015 amid the slump in global crude oil prices as the 3 per cent fiscal deficit target in 2015 will not be affected.

Another deputy finance minister, Datuk Ahmad Maslan, also claimed that the ringgit’s depreciation triggered by the fall in oil price would spur the local economy, encouraging demand for local products as imports become more costly.

Khairy today noted, however, that Ahmad’s observation on cheaper local goods may not hold true in the immediate future.

“We have intermediate imports, when we want to export a product, the finished product could be from Malaysia but the components are imported from other countries and the prices are going up,” he explained.

Devastating floods that have ravaged several states in the peninsula will also be an added drain to Putrajaya’s coffers, Khairy said.

Putrajaya has been under pressure to clarify the effects of falling oil price on its Budget for this year as well as the impact to the local economy.

Malaysia’s oil-related revenue totalled RM63 billion in 2013, accounting for 29.5 per cent of total government revenue.

International news wire Reuters reported on December 2 state oil company Petronas as saying that its various payments to the government in the form of tax, royalties and dividends could drop by 37 per cent this year if oil stayed at around US$75 a barrel.