Malaysia Vows to Keep RON95 Petrol at RM1.99 Despite Soaring Global Oil Prices

KUALA LUMPUR, March 3 — The Malaysian federal government has reiterated its firm commitment to keeping the retail price of RON95 petrol at RM1.99 per litre, choosing to absorb rising global crude oil costs rather than passing increases on to consumers — even as Brent crude prices climb amid geopolitical unrest and supply‑side pressures.

Economy Minister Akmal Nasrullah Nasir emphasised today that there are no plans for drastic changes to the current RON95 price or the broader fuel price regime, despite volatility in international oil markets triggered by conflict in the Middle East. The minister’s statement follows concerns that disruptions to oil supply routes — particularly through the Strait of Hormuz — have elevated crude price benchmarks.

Speaking at a media event, Akmal Nasrullah confirmed that the government will continue to absorb the cost differential between domestic pump prices and high global oil prices through existing subsidy arrangements. This ensures that motorists across the country will continue to pay RM1.99 per litre for RON95 petrol at the pump, one of the lowest rates in Southeast Asia.

He explained that the current geopolitical situation does not present compelling evidence to alter price policy, and the government remains confident that the situation can be closely monitored without resorting to sudden adjustments that could burden consumers. The minister also noted that the government’s economic growth forecast for 2026 — ranging between 4.0 % and 4.5 % — remains intact despite global uncertainties.

The decision to hold RON95 at RM1.99 per litre is part of Malaysia’s targeted fuel subsidy programme known as the BUDI MADANI RON95 (BUDI95) initiative, under which eligible Malaysian citizens enjoy subsidised prices while non‑eligible users pay at market rates. This system was introduced in late 2025 and is designed to provide relief to ordinary motorists while better targeting government spending.

Prime Minister Anwar Ibrahim, who also serves as Finance Minister, addressed the issue earlier this week, acknowledging that global oil prices are beyond Malaysia’s direct control but stressing that the government will make every effort to minimise domestic price shocks. “We will give the maximum effort to hold off any price increases,” he told reporters, while also clarifying that market forces could still present challenges if oil continues to spike sharply.

Despite the government’s assurances, economists and market analysts note that holding petrol at subsidised levels amid rising crude prices will increase fiscal pressure. As Brent oil trades higher — influenced by geopolitical risk premiums — the gap between global fuel costs and the subsidised RON95 pump price widens, meaning the federal subsidy bill escalates. This could have implications for future budget planning and the timeline for broader fuel subsidy reforms.

In addition to shielding consumers, policymakers argue that maintaining steady petrol prices helps mitigate broader inflationary pressures. Fuel costs are a significant component of transportation and logistics, and sharp increases often ripple through the prices of goods and services, affecting the overall cost of living. By stabilising petrol prices, the government aims to soften the impact of global oil price spikes on everyday expenses.

Industry observers also point out that while RON95 prices are held steady, other fuel grades such as RON97 and diesel have seen regular market‑based adjustments under the Automatic Pricing Mechanism (APM) — reflecting their closer linkage to global crude movements. Although such adjustments affect a smaller proportion of motorists, they demonstrate the balancing act between subsidy support and market pricing.

Looking ahead, analysts warn that prolonged geopolitical instability and rising oil costs will make it increasingly expensive for the government to subsidise fuel at current levels. They suggest that future policy discussions may involve reassessing subsidy targeting, fiscal safeguards, or even phased realignment of fuel prices if global conditions remain volatile.

For now, Malaysians are assured that RON95 — one of the country’s most widely used petrol grades — will remain at the affordable and subsidised price of RM1.99 per litre, underscoring the government’s priority of cushioning households from sharp energy cost increases.