Fuel prices in Malaysia drop but govt warns supply shortage risks could put new pressure

Pump prices in Malaysia will fall for a second straight week, between June 4 and June 10, as Malaysia's Ministry of Finance announced on Wednesday (June 3) downward adjustments to the posted prices for petrol and diesel.

For this period, the retail prices for unsubsidised Ron95 and Ron 97 will fall by 20 cents and 30 cents, respectively, to RM3.72 (S$1.20) per litre and RM4.35 per litre.

Meanwhile, the price of diesel in Peninsular Malaysia was also set 20 cents lower, at RM4.67 per litre.

The price of subsidised Ron95 petrol (Budi95) remains unchanged at RM1.99, in line with Malaysian Prime Minister Anwar Ibrahim's assurances before Hari Raya Haji (May 27).

Explaining its decision, the ministry said that the reductions follow the decline in average international market prices the previous week.

However, it also cautioned that the consecutive lowering of pump prices does not signal that the global petroleum market has returned to normal.

"On the contrary, with the 100th day of the conflict (nearing) and the latest developments in the Middle East, there is still a high risk that crude oil and petroleum product prices will remain high in the medium term," the ministry stated.

It also noted that major fuel importing countries in Asia have been forced to increase their purchases of crude oil from alternative sources to accommodate supply disruptions from the Middle East, adding that the risk of global inventory depletion and supply shortages could put new pressure on prices in the coming period.

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

Malaysians urged to exercise prudence in fuel consumption

As hostilities in the Middle East erupt anew on Wednesday with Iran firing missiles at Kuwait and Bahrain, while diplomatic talks between Tehran and Washington showed little progress, both the Brent and US West Texas Intermediate benchmarks have settled at a one-week high. 

This, coinciding with another expected peak vehicular volume on Malaysia's highway network between June 4 and 7, has prompted the ministry to urge Malaysians to exercise prudence in their fuel consumption.

Motorists are urged to reduce unnecessary travel and ensure efficient travel planning.

[[nid:737295]]

editor@asiaone.com