Malaysia hit by global oil price surge despite producer status, Anwar explains

THE country is feeling the impact of rising global oil prices triggered by the conflict in West Asia, despite being an oil-producing nation, Prime Minister Datuk Seri Anwar Ibrahim has said, citing structural reliance on imported petroleum and disruptions to key global supply routes.

He said the escalation of tensions following attacks involving the United States and Israel on Iran has driven up oil prices worldwide, raising concerns over supply constraints and domestic cost pressures.

A key factor behind the surge is disruption to the Strait of Hormuz, a vital artery for global energy shipments through which a significant portion of the world’s oil supply passes.

"When this route is disrupted, global oil supply becomes limited, and prices surge. Malaysia is also affected, as nearly 50 per cent of the country's oil supply passes through the Strait of Hormuz.

"Although Malaysia is an oil producer, we actually import more oil than we export," he said.

The Prime Minister explained that the tightening of global supply has translated into higher prices, which in turn affects Malaysia due to its dependence on imported refined petroleum products.

To mitigate the impact on households and businesses, the government has significantly increased fuel subsidies within a short period.

Anwar said allocations rose from approximately RM700 million to RM3.2 billion in less than a week, reflecting the urgency of stabilising domestic fuel prices.

He added that subsidy mechanisms such as the Budi Madani RON95 and Budi Diesel programmes ensure that the public and most businesses are not exposed to full market prices.

"In an increasingly uncertain global situation, efforts to safeguard the welfare and well-being of the people remain a priority for the Madani government," he said.

Despite sustained upward pressure on global oil markets, Anwar reiterated that the subsidised price of RON95 petrol will remain at RM1.99 per litre, underlining the government’s commitment to protecting consumers from the rising cost of living. - March 22, 2026