Fuel prices fall as Malaysia warns of prolonged global oil supply risks

MALAYSIAN motorists will benefit from lower petrol and diesel prices this week after the government announced significant reductions in retail fuel rates, although officials warned that the global petroleum market remains under considerable strain due to ongoing geopolitical tensions and supply disruptions.

The Ministry of Finance said the latest adjustments, effective from June 4 to June 10, were made in accordance with the Automatic Pricing Mechanism (APM) following a decline in average international petroleum prices recorded during the previous week.

Despite the reduction, the government stressed that the lower retail prices should not be interpreted as a sign that global energy markets have stabilised.

As the conflict in West Asia approaches its 100th day, authorities said risks to global crude oil and petroleum product prices remain elevated, with supply constraints expected to persist over the medium term.

The ministry noted that major oil-importing economies across Asia have been forced to increase purchases from alternative suppliers to compensate for disruptions to traditional supply routes originating from West Asia.

Although crude oil exports from the United States to Asia have risen to record levels, the increase has not been sufficient to fully offset lost supplies through affected trade corridors.

The situation, the ministry said, underscores continuing physical supply shortages in the global petroleum market, even as average prices eased over the previous week.

Officials warned that should the conflict continue, shrinking global inventories and further supply shortages could place renewed upward pressure on crude oil and petroleum product prices in the months ahead.

Against that backdrop, the MADANI Government said it would continue maintaining targeted fuel subsidies to shield households and selected economic sectors from volatile international market conditions.

The ministry also urged consumers to use fuel prudently by planning journeys more efficiently and avoiding unnecessary travel in order to support national fuel security.

Under the latest revision, RON97 petrol will fall by 30 sen to RM4.35 per litre from RM4.65 previously.

RON95 petrol will decrease by 20 sen to RM3.72 per litre from RM3.92, while diesel in Peninsular Malaysia will also be reduced by 20 sen to RM4.67 per litre from RM4.87.

The government will continue maintaining subsidised fuel prices under existing assistance schemes, with subsidised RON95 under the BUDI95 programme remaining at RM1.99 per litre.

Subsidised diesel prices in Sabah, Sarawak and Labuan will also remain unchanged at RM2.15 per litre, while diesel under the Subsidised Diesel Control System and petrol under the Subsidised Petrol Control System continue at their existing rates.

According to the ministry, more than 14 million eligible recipients continue to benefit from the BUDI95 programme.

Based on the current unsubsidised RON95 price of RM3.72 per litre, a consumer using 200 litres of fuel would incur a monthly cost of RM744.

However, eligible BUDI95 recipients pay only RM398 for the same volume, with the government absorbing up to RM346 per recipient each month.

The ministry added that the current market price of unsubsidised diesel at RM4.67 per litre is more than double the subsidised diesel rate of RM2.15 per litre, highlighting the extent of government intervention aimed at containing transportation and logistics costs that ultimately affect consumers.

The government said it would continue balancing cost-of-living pressures faced by households with the need for prudent fiscal management, while ensuring adequate and secure national fuel supplies amid ongoing uncertainty in global energy markets. - June 3, 2026