KUALA LUMPUR (Sept 16): Retail prices for unsubsidised fuels in Malaysia will jump by 35 sen per litre for the week starting Sept 17, driven by a sharp increase in global crude oil prices as geopolitical tensions in the Middle East escalate.
The unsubsidised price per litre of RON95 will rise to RM4.37 from RM4.02, while RON97 will climb to RM4.85 from RM4.50, the Ministry of Finance said in a statement on Wednesday. Unsubsidised diesel will cost RM5.27, up from RM4.92.
Subsidised fuel prices remain unchanged, with RON95 under Budi95 staying at RM1.99 per litre and diesel under Budi Diesel at RM2.10 per litre.
This means the government will subsidise RON95 at RM2.38 per litre, or 54% of the market price. At the same time, it will bear RM2.62 per litre or 60% of the market price to subsidise diesel.
The baseline monthly quotas for Budi95 and Budi diesel have been raised to 300 litres on Sept 1, while eligible owners of diesel pickups and jeeps get an extra 100 litres, raising their monthly allowance to 400 litres.
Intense pressure on global energy markets
The latest price spike reflects intense pressure on global energy markets as regional hostilities crossed the 200-day mark, the ministry noted.
Vessel traffic through the Strait of Hormuz have plummeted to single digits, it said, after Iran targeted 10 vessels in retaliation for US strikes on five Iranian tankers.
The disruption deepened after drone strikes forced a temporary shutdown of Saudi Arabia's East-West pipeline — a crucial artery bypassing the strait — alongside the suspension of Gulf security talks, the ministry pointed out.
Consequently, benchmark Brent crude breached US$100 per barrel to hover near US$110 per barrel during the calculation period for the automatic pricing mechanism or APM, which determines retail fuel prices in Malaysia.
At the same time, refining margins remained high following capacity outages in Russia. "Crude oil constraints and disruptions to refining capacity continue to limit the output of refined petroleum products, thereby putting upward pressure on global oil prices," the ministry added.
The escalating Middle East tensions, together with the protracted Russia-Ukraine war, are expected to keep global fuel prices volatile, it warned.
To cushion domestic consumers and businesses from external shocks, the government reaffirmed that targeted fuel subsidies will absorb the bulk of the market increase.
As for commercial transports, the Subsidised Petrol Control System stays pegged at RM2.05 per litre, while the Subsidised Diesel Control System remains at RM2.15 per litre.
The government will maintain a prudent approach to shield consumers, the ministry stressed, while ensuring the country's domestic fuel supplies remain stable and secure.