PUTRAJAYA, May 4 — Prime Minister Datuk Seri Anwar Ibrahim stressed that the country’s oil and gas supply remains secure, but rising global fuel prices continue to strain government finances as it maintains the RON95 price at RM1.99 to protect the majority.
He said disruptions and risks to international trade routes due to conflicts in West Asia have led to higher shipping and insurance costs, which in turn are affecting fuel prices.
However, he added that Malaysia is still able to ensure sufficient domestic oil and gas supply through its good relations with Iran and other producing countries, including Russia, Turkmenistan and Uzbekistan.
“So, fuel supply is assured, but prices are rising.
“This is not a problem originating from us, but from external factors. That is why we are compelled to face the challenge of rising fuel prices,” he said while delivering a speech and briefing on the issue at the Ministry of Natural Resources and Environmental Sustainability’s monthly assembly here today.
Anwar, who is also finance minister, said the government is committed to ensuring that rising global oil prices do not burden the majority of the people through the implementation of the BUDI MADANI RON95 (BUDI95) subsidy, despite having to bear a heavy financial cost.
He said that at present, the government is spending RM5 billion a month on fuel subsidies, compared with RM700 million in January when the BUDI95 subsidy was introduced.
“Malaysia is still maintaining the RON95 price at RM1.99 per litre. If prices surge further, the subsidy could exceed RM6 billion a month. But for now, the government is bearing about RM5 billion a month.
“In January, when I announced the RON95 subsidy, we were covering RM700 million a month. I thought that was manageable, as Malaysia is not a poor country,” he said.
The prime minister urged all parties to understand that rising oil prices are a global reality and not the result of weaknesses in domestic policy.
Oil prices rose above US$120 a barrel on Thursday after United States President Donald Trump warned Iran that a naval blockade in the Strait of Hormuz could continue for several months.
