Motorists in Malaysia are facing another increase in fuel prices, with unsubsidised RON95, RON97 and diesel all becoming more expensive from Sept. 24 as disruptions to global refined-fuel supplies continue to push prices higher.
For the week from Sept. 24 to 30, unsubsidised RON95 rises 20 sen to RM4.57 per litre, while RON97 also increases 20 sen to RM5.05. Unsubsidised diesel goes up 15 sen to RM5.42 per litre. The latest adjustment marks the fifth increase in six weeks.
The increases are being driven less by crude oil alone and more by a tightening global market for refined petroleum products. Malaysia’s Finance Ministry said disruptions to refining operations in Russia, one of the world’s major diesel exporters, have further constrained supplies.
Diesel exports from West Asia also fell by more than 50 per cent between March and August, adding pressure to an already tight international market.
The conflict in the Middle East has become another major source of uncertainty. Disruptions to petroleum flows through the Strait of Hormuz have affected shipping and increased the cost of transporting fuel. The Malaysian government said a recovery in shipping through the strategic waterway could help ease pressure on both crude oil and refined petroleum prices.
Global diesel markets are facing particularly strong pressure. International prices have surged as conflicts involving Iran and Ukraine disrupt supplies from major producers and damage refining infrastructure. At the same time, many refineries are already operating at high utilisation rates, leaving limited spare capacity to quickly replace lost supplies.
Malaysia determines its weekly fuel prices using the Automatic Pricing Mechanism, or APM, which adjusts retail prices according to movements in petroleum markets. The system has been used since 1983 as a way of responding to global price fluctuations.
However, the higher market prices do not mean every Malaysian motorist will immediately pay the full unsubsidised rate.
Eligible Malaysians continue to receive targeted fuel subsidies. Under BUDI95, eligible users pay RM1.99 per litre for RON95, compared with the unsubsidised price of RM4.57. Eligible BUDI Diesel recipients pay RM2.10 per litre, compared with RM5.42 for unsubsidised diesel.
That means the government is currently absorbing RM2.58 per litre of the unsubsidised RON95 price for eligible BUDI95 users, while the subsidy on diesel amounts to RM3.32 per litre. Other controlled fuel prices, including those under the Subsidised Petrol Control System and Subsidised Diesel Control System, also remain in place.
The latest increase follows a 35-sen-per-litre jump across RON95, RON97 and diesel for Sept. 17 to 23. Before that, prices had also risen in earlier weeks, reflecting the rapid change in global petroleum markets.
The government has warned that fuel markets could remain volatile in the medium term as long as geopolitical uncertainty persists. Even if crude oil prices moderate, shortages of refined products can continue to keep petrol and diesel prices elevated.
For households and businesses, the impact can extend beyond the pump. Higher diesel costs can raise expenses for trucking, logistics, agriculture and other industries, while more expensive petrol can add pressure to household transportation budgets. Sustained fuel-cost increases can also feed into the prices of goods and services if businesses pass higher transportation and operating expenses to consumers.
For now, Malaysia says domestic fuel supplies remain sufficient and is maintaining targeted subsidies to cushion eligible consumers from international price shocks. But the global supply picture remains vulnerable to further disruptions.
The bigger question is whether the Strait of Hormuz and global refining networks can stabilise soon enough to prevent another round of fuel increases — or whether Malaysia’s motorists will face even more pressure at the pump in the weeks ahead.
