Malaysia Spends RM2 Billion Monthly to Keep RON95 Petrol at RM1.99 Amid Rising Global Oil Prices
KOTA KINABALU – The Malaysian government is spending billions of ringgit each month to maintain the price of RON95 petrol at RM1.99 per litre, despite soaring global crude oil prices driven by escalating geopolitical tensions in the Middle East.
Prime Minister Anwar Ibrahim said the government currently allocates about RM2 billion per month in subsidies under the Budi MADANI RON95 initiative, a programme designed to shield Malaysians from the impact of rising fuel costs.
According to him, maintaining the price cap translates into an estimated RM24 billion in annual subsidies, a significant fiscal burden undertaken to prevent the public from being affected by volatile global energy markets.
Anwar noted that despite rising production and import costs, Malaysia continues to maintain one of the lowest petrol prices globally, thanks to the government’s subsidy policy.
Higher Diesel Subsidies for Sabah and Sarawak
Beyond petrol subsidies, the federal government also continues to support diesel prices in Sabah and Sarawak.
Diesel in both states remains capped at RM2.15 per litre, even though the actual market cost has climbed to about RM4.30 per litre.
The Prime Minister revealed that subsidy spending for diesel in the two East Malaysian states has surged sharply.
“Last year, diesel subsidies for Sabah and Sarawak amounted to about RM2 billion. However, due to the surge in global oil prices, the government may have to spend as much as RM4.6 billion this year if current prices persist,” he said.
The decision to maintain the subsidy was made to prevent higher transportation costs from placing additional financial pressure on residents in the two states.
The event was attended by Sabah Chief Minister Hajiji Noor, Domestic Trade and Cost of Living Minister Armizan Mohd Ali and Deputy Minister Fuziah Salleh.
Middle East Tensions Driving Oil Price Surge
Anwar attributed the sharp rise in oil prices to geopolitical instability in the Middle East.
He said the escalation of military tensions, including attacks involving Israel and the United States against Iran, has intensified regional instability and disrupted global energy supply chains.
One major consequence has been the closure of the Strait of Hormuz, a strategic maritime route through which a large portion of the world’s oil supply normally passes.
The disruption has left international shipping routes strained, pushing up transportation and insurance costs throughout global supply chains.
Malaysia Remains Stable Amid External Challenges
Despite the international crisis, the Prime Minister said Malaysia remains stable and continues to be viewed as a moderate voice on the global stage.
He revealed that several foreign leaders have reached out to Malaysia for perspectives on resolving tensions and promoting diplomatic solutions to the conflict.
According to him, the country’s political stability and economic resilience enable the government to continue implementing protective measures such as fuel subsidies.
Public Urged to Practise Responsible Spending
During the National Consumer Day 2026 event, Anwar also urged Malaysians to adopt responsible consumer habits.
He warned that excessive spending driven by aggressive marketing campaigns often leads households to purchase goods they do not truly need.
The Prime Minister highlighted the economic concept of “conspicuous consumption”, where individuals buy products primarily to signal status rather than necessity.
The government, he added, will continue using consumer awareness initiatives to educate the public about making rational purchasing decisions, choosing quality goods at reasonable prices and practising moderation, especially during the Ramadan period.
-wilayah.com.my
