Malaysia sees sharp spike in fuel subsidy bill

PETALING JAYA – Malaysia’s fuel subsidy bill has surged more than fourfold in under a week due to a sharp spike in global oil prices triggered by disruptions in the Middle East shipping route, said Prime Minister Anwar Ibrahim.

The national monthly RON95 and diesel subsidies have risen from RM700 million (S$227 million) to RM3.2 billion within the period, he said in an explainer video shared on his official Facebook page on March 22.

The disruption in the Strait of Hormuz, through which 20 per cent of the world’s oil supply usually passes, has tightened global supply.

“Within less than a week, global oil prices surged from around US$70 to nearly US$120 per barrel,” Datuk Seri Anwar said.

Despite being an oil-producing country, Malaysia remains dependent on imports, with nearly half of its supply coming through the affected route.

In the post, Mr Anwar said Malaysia exported crude oil worth about US$5.5 billion (S$7 billion) in 2025 but imported almost US$12.6 billion, resulting in a deficit exceeding US$7 billion.

“Malaysia does produce oil, but we also import more oil than we export,” he added.

He said imported crude must be refined, transported and insured before reaching consumers, with all costs rising during conflict.

The increase has ripple effects, he said, impacting ­transport costs, food prices and household spending nationwide.

To shield consumers, the government has stepped up subsidies so that Malaysians do not bear the full brunt of global price increases.

“In these challenging times, Malaysia has chosen to absorb part of the global cost pressures to protect the rakyat (people),” he said.

Mr Anwar also expressed confidence that the country would be able to weather the challenges ahead, noting that Malaysia has overcome similar pressures in the past. THE STAR/ASIA NEWS NETWORK