CIMB Securities said that rising global crude oil prices could boost national revenue but also increase the cost of petrol subsidies.
The firm explained that every RM4.25 increase in crude oil prices could generate an additional RM250 million to RM300 million for Malaysia through petroleum income tax.
CIMB Securities said government revenue would surge if oil prices exceeded RM339.68 per barrel, but the gains were offset by increased subsidy costs.
CIMB warned that high oil prices over a long period could affect the country's finances and reduce allocations for infrastructure development and social programmes.
The organisation said that if the price increase is only temporary, the impact on the national budget is likely to be insignificant and small.
CIMB also discussed that although Malaysia benefits as an oil exporter, the existing RON95 subsidy could reduce profits and add pressure to the national budget.
