KUALA LUMPUR — An analyst has corrected a common misconception that fuel prices here should not rise because Malaysia is an oil-producing country.
Prof Dr Azmi Hassan the increase in global oil prices from US$60-US$65 per barrel previously, to around US$110 currently has made price adjustments unavoidable.
As such, the hike in unsubsidised fuel prices here reflects rising global oil prices, the geostrategist and senior fellow at Nusantara Academy of Strategic Research (NASR) said.
“While Malaysia exports crude oil and earns revenue, it still imports refined fuel for domestic use, making it exposed to global price movements,” he told Bernama.
On Wednesday, prices for unsubsidised fuel jumped 80 sen per litre to RM4.72 for diesel in Peninsular Malaysia, while RON97 petrol went up 70 sen per litre to RM4.55. Unsubsidised RON95 remained unchanged at RM3.27 per litre. These prices are for the week of March 19 to 25, the Finance Ministry said.
After the fuel price announcement, Opposition Leader Datuk Seri Hamzah Zainuddin asked the government to delay the price increase for unsubsidised fuel until after Hari Raya or to implement it in stages so as to cushion the impact on the people.
However, subsidised fuel remains at RM1.99 per litre for RON95 under the Budi Madani RON95 (BUDI95) initiative, while subsidised diesel in Sabah, Sarawak and Labuan remain at RM2.15 per litre.
Azmi said these targeted subsidy measures help mitigate the impact of rising fuel costs.
“The RM1.99 price is basically a giveaway to the people,” he added.
The Madani government is maintaining the BUDI95 initiative despite despite global crude oil prices exceeding US$100 per barrel following the conflict involving Iran, which Azmi cautioned may not be sustainable in the long term.
“We just can’t enjoy the RM1.99 forever, with increasing oil prices worldwide,” he said.
The current subsidy bill is estimated at RM3.2 billion monthly.
However, Malaysia remains in a relatively stronger position compared to some countries, Azmi added, noting that inefficiencies in other oil-producing nations have affected their fuel supply systems.
Amid rising global oil prices triggered by US-Iran conflict, the Ministry of Finance (MoF) announced on March 12 an increase in unsubsidised fuel prices in Peninsular Malaysia. – March 20, 2026