PUTRAJAYA: With crude oil prices soaring past US$100 (RM394) a barrel yesterday, Malaysia faces a huge challenge in keeping fuel prices down at petrol pumps.
The effects of the rising global oil prices due to the conflict in the Middle East will be felt across the board – from the logistics to the semi-conductor industries.
However, the biggest issue will be the pump price of subsidised RON95.
The government will continue efforts to maintain the price at RM1.99 per litre, Prime Minister Datuk Seri Anwar Ibrahim has reiterated.
“Brent oil is now more than US$100.
“We are still maintaining RM1.99 for RON95, and we will do everything we can so as not to burden the people,” he told the Domestic Trade and Cost of Living Ministry’s monthly assembly here yesterday.
While US$100 a barrel is the highest Brent has hit since July 2022, economists have warned that the price could rise higher, even up to US$150 (RM591), if the Middle East conflict continues.
If the crisis does continue for more than two months, Anwar said Malaysia may not be able to sustain the subsidy.
He told Malaysians to remain prudent in their spending.
“We must be mindful and cautious in managing our spending, as global developments can have an impact on the domestic economy,” he added.
A prolonged closure of the Strait of Hormuz, one of the world’s most critical oil shipping routes, could trigger a severe global economic crisis, he said.
Hundreds of oil tankers are stranded in the narrow strait, which is the only sea route for countries like Kuwait, Iraq, Saudi Arabia, UAE, Bahrain and Qatar.
Anwar noted that disruptions in the region have already affected the movement of oil, gas and essential goods.
“This will inevitably double or triple global costs, including transportation and logistics,” he said.
Finance Minister II Datuk Seri Amir Hamzah Azizan, however, offered some hope.
He said Malaysia is now well-positioned to withstand external shocks, including global oil price volatility, thanks to improvements to fiscal management, subsidy reforms and robust economic growth.
Beyond the subsidy rationalisation plan over the past two years, which has strengthened the fiscal position, Malaysia’s status as a net energy exporter could also provide resilience, he said.
Malaysia’s strong economic performance last year was a further buffer.
“Fundamentally, it is important to recognise that Malaysia is a net energy exporter. In that sense, we do have some positive benefits.
“We also started the year with a very strong base.
“GDP grew 5.2% last year and the numbers are still looking promising in the first quarter,” he told reporters after launching the Capital Market Masterplan 2026-2030.
Amir Hamzah also said Putrajaya would ensure petrol supplies remained sufficient, with stocks at healthy levels.
“We also hope the situation in the Middle East will find a resolution soon. If this is not a prolonged issue, Malaysia has the capacity to withstand it,” he said.
At the same event, Anwar said Malaysia must embrace innovation and reform to unlock its full capital market potential.
