The subsidized price of RON95 petrol under the BUDI MADANI initiative remains at RM1.99 per liter, despite global crude oil prices soaring above $100 per barrel due to conflicts in West Asia.
The Ministry of Finance (MOF) confirmed this decision as a measure to protect the people, especially ahead of the Aidilfitri festive season.
Meanwhile, the market prices of other fuels such as RON97 and diesel were increased in stages.
The price of RON97 increased from RM3.85 to RM4.55 per liter, while diesel in Peninsular Malaysia jumped to RM4.72 per liter.
On the other hand, the price of diesel in Sabah, Sarawak and Labuan and the price of non-subsidized RON95 remained at RM2.15 and RM3.27 per liter, respectively.
MOF admitted that the government bears the subsidy burden of more than RM3 billion every month to maintain the price of BUDI95 and subsidized diesel for public transport and land goods.
This targeted subsidy continues to protect over 400,000 vehicles in the transport sector such as express buses, taxis and lorries. Although Malaysia is an oil producing country, domestic prices are still tied to the global market.
Geopolitical tensions in West Asia and supply uncertainty continue to be the main causes of rising world oil prices.
The MADANI government has taken the approach of maintaining subsidies to prevent the price burden from being fully transferred to the people.
However, paradoxically, fuel market price increases continue to occur aggressively for non-subsidized products.
This raises the question of how long the government can bear the burden of massive subsidies without affecting the country's fiscal.
Although fuel prices in Malaysia are among the lowest in the region, maintaining these subsidies is feared to be an unsustainable long-term burden in the face of global oil market volatility.
