Fuel prices in Malaysia up again as global oil prices rise amid renewed US-Iran conflict

Fuel prices in Malaysia will rise for the third consecutive week as global oil prices climb amid renewed conflict between the US and Iran, the finance ministry announced on Wednesday (July 29).

For the period July 30 to August 5, retail prices for unsubsidised Ron95 and Ron97 petrol will increase by 20 sen again to RM3.82 (S$1.21) and RM4.40 respectively. 

Meanwhile, the price of unsubsidised diesel will go up by 20 sen to RM4.62 per litre.

But the price of subsidised Ron95 and subsidised diesel will remain unchanged at RM1.99 and RM2.10 respectively.

Malaysia uses the automatic pricing mechanism formula — introduced in 1983 to stabilise prices based on market fluctuations — when determining weekly petrol prices.

Explaining the increase, the ministry stated that the price of unsubsidised petroleum products is influenced by movements in the global oil market in the previous week.

"The ongoing conflict between the United States and Iran has pushed the price of Brent crude oil to its highest level in six weeks, at US$96 per barrel," the ministry highlighted.

That price was recorded on July 23 as the US launched a new round of strikes on Iran and Yemen's Houthis targeted oil tankers in the Red Sea. 

Fears that the disruption could widen further to block another sea route sent global oil prices surging in one of the steepest rises, breaking through US$100 a barrel for the first time since May. 

The finance ministry also noted that these risks have raised concerns about disruptions to global petroleum supplies.

"As long as the conflict has not reached a final resolution, petroleum product prices are expected to continue to be plagued by global market uncertainty. 

"At the same time, emergency petroleum reserves of several major economies are reported to be dwindling," the ministry said, cautioning that the need for these countries to replenish their respective reserves may increase pressure on petroleum prices in the short term.

It also urged motorists to plan their journeys so as to reduce unnecessary travelling, which can, in turn, reduce pressure on the country's supply and subsidy pressures.

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editor@asia.com