Malaysia fuel prices fall for first time in 3 weeks as global oil prices ease

Fuel prices in Malaysia fell for the first time in three weeks after rising for three consecutive weeks, the Finance Ministry announced on Wednesday (Aug 5).

For the period between Aug 6 and 12, retail prices for unsubsidised Ron95 and Ron97 petrol will both fall by 5 sen per litre, to RM3.77 (S$1.18) and RM4.35 respectively.

Meanwhile, the price of unsubsidised diesel will also fall by 5 sen to RM4.57 per litre.

However, subsidised fuel prices remain unchanged, with Ron95 and Budi Diesel's prices unchanged at RM1.99 per litre and RM2.10 per litre respectively.

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

The latest reduction was due to the drop in global oil prices at the end of the APM calculation period last week, the ministry said.

However, it also cautioned that the ongoing geopolitical situation in the Middle East continues to cause "significant fluctuations" in the global oil market.

The ministry added that petroleum prices remain sensitive to the risk of supply disruptions if major shipping routes — the Strait of Hormuz and the Red Sea — become affected due to an escalation of the conflict. 

"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," the ministry said.

Oil prices on Wednesday eased on hopes of progress for a deal that would allow oil tankers to freely exit the Persian Gulf again and deliver crude around the world.

This follows US President Donald Trump's announcement that a deal to reopen the Strait of Hormuz could come as early as Wednesday or Thursday.

At about 9.20pm, Brent crude, the international standard, hovered around US$80 a barrel.

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editor@asiaone.com