PETALING JAYA: RON95 and diesel subsidies have risen from RM700mil to RM3.2bil within less than a week as global prices spiked following disruptions to a key West Asian shipping route, says Datuk Seri Anwar Ibrahim.
In an explainer video shared on his official Facebook page Sunday (March 22), the Prime Minister said that the West Asia conflict had affected the Strait of Hormuz, through which about 20% of the world’s oil supply passes.
The disruption has tightened global supply, pushing prices up sharply within days.
“Within less than a week, global oil prices surged from around US$70 to nearly US$120 per barrel,” Anwar said.
Despite being an oil-producing country, Malaysia remains dependent on imports, with nearly half of its supply coming through the affected route.
The post said Malaysia exported crude oil worth about US$5.5bil last year but imported almost US$12.6bil, resulting in a deficit exceeding US$7bil.
“Malaysia does produce oil, but we also import more oil than we export,” Anwar said.
He added that imported crude must be refined, transported and insured before reaching consumers, with all costs rising during periods of conflict.
The increase has ripple effects beyond fuel, impacting transportation costs, food prices and household spending nationwide.
To shield consumers, the government has stepped up subsidies so that Malaysians do not bear the full brunt of global price increases.
“In these challenging times, Malaysia has chosen to absorb part of the global cost pressures to protect the rakyat,” Anwar said.
The post also expressed confidence that the country would be able to weather the challenges ahead, noting that Malaysia has overcome similar pressures in the past.
"In an increasingly volatile world, efforts to protect the welfare and well-being of the people remains a priority of the Madani government," Anwar added.
