Kuala lumpur: Recent increases in unsubsidised fuel prices in Malaysia reflect rising global oil prices, according to an analyst. Geostrategist and Senior Fellow at the Nusantara Academy of Strategic Research (NASR), Prof Dr Azmi Hassan, highlighted that the surge in global oil prices from US$60-US$65 per barrel to approximately US$110 has necessitated price adjustments in Malaysia.
According to BERNAMA News Agency, while the public generally understands that fuel prices have risen due to higher global oil prices, there is a perception that prices should not rise because Malaysia is an oil-producing country. Prof Dr Azmi Hassan explained that Malaysia's economy, despite being bolstered by crude oil exports, is still vulnerable to global price fluctuations due to its reliance on imported refined fuel for domestic consumption.
He further elaborated on the government's targeted subsidy measures, such as the subsidised RON95 petrol price under the BUDI MADANI RON95 (BUDI95) initiative, which help cushion the impact of escalating fuel costs. 'Initiatives like BUDI95 can control the cost of logistics for ordinary people. The RM1.99 price is basically a giveaway to the people,' he noted.
However, Azmi cautioned that the current subsidy scheme, with an estimated monthly cost of RM3.2 billion, may not be viable in the long term. 'We just can't enjoy the RM1.99 forever, with increasing oil prices worldwide,' he warned, highlighting Malaysia's relatively stronger position compared to other oil-producing nations that face inefficiencies in their fuel supply systems.
Azmi also noted the regional differences in fuel pricing, with diesel remaining subsidised in Sabah and Sarawak due to its extensive use in these areas. 'The government is still maintaining lower diesel prices in Sabah and Sarawak due to the fact that RON95 in the peninsula is maintained at RM1.99. Diesel is widely used in Borneo states not only for logistical purposes but also by both the private and public sectors,' he explained.
He emphasized that any increase in diesel prices in Sabah and Sarawak could severely affect living costs. 'If there is an increase from RM2.15 in Sabah, even by 10 or 20 sen, there will be an impact on the cost of living because of the wide usage of diesel in all segments of life in Borneo. The impact is going to be severe in Sabah and Sarawak in terms of higher cost of living and expenses,' he stressed.
Amid rising global oil prices brought on by the US-Iran conflict, the Ministry of Finance (MoF) announced on March 12 an increase in unsubsidised fuel prices in Peninsular Malaysia. From March 12 to March 18, retail prices for unsubsidised petrol and diesel were adjusted, with RON97 rising by 60 sen to RM3.85 per litre and unsubsidised RON95 increasing by 60 sen to RM3.27 per litre, while diesel rose by 80 sen to RM3.92 per litre.
In the latest revision effective March 19 to March 25, RON97 further increased to RM4.55 per litre, while diesel in Peninsular Malaysia rose to RM4.72 per litre. Unsubsidised RON95 remained unchanged at RM3.27 per litre. Meanwhile, diesel prices in Sabah, Sarawak, and Labuan remain unchanged at RM2.15 per litre.