Cheaper than oil-rich Saudi Arabia, PM Anwar says Malaysia fuel prices will never be less than RM 2.05

At an event on Sunday, Prime Minister Anwar Ibrahim said that prices of RON 95 will never go below RM 2.05 per litre citing Saudi Arabia as an example. The oil-rich Kingdom produces more oil than Malaysia and yet prices there are more expensive.

He also added that between RM 30 billion and RM 40 billion were spent in subsidies to keep prices of RON 95 petrol at RM 2.05 per litre.

“The 2023 fuel prices in Saudi Arabia are higher than Malaysia and how much cheaper can we go? Subsidies are already skyrocketing,” the Prime Minister said in a video clip posted on X, formerly known as Twitter. He was speaking at the Majlis Rahmah Mesra Madani event at Universiti Teknologi Petronas (UTP) at Seri Iskandar, Perak.

Anwar acknowledged criticisms over his previous campaign promise in 2008 to bring down fuel prices. He stated that the present economic situation is different now compared to 15 years ago.

“That was in 2008, oil prices in Saudi Arabia were 50 cents per litre, while in Malaysia it was around RM 1.80 per litre,” Anwar explained. Currently, a litre of RON 95 petrol in Saudi Arabia costs SAR 2.33 (RM 2.93).

Also read: A portion of M40 car owners may be cut off from fuel subsidies come Jan 2024

The Prime Minister told Parliament last month that fuel prices could not be lowered due to the current crude oil prices. Brent crude oil which is a benchmark for oil prices reached USD 95 (RM 470) per barrel as of yesterday.

Analysts are expecting prices to touch USD 100 (RM 495) per barrel soon which could prolong inflation globally.

The government has so far spent more than RM 50 billion annually to subsidise fuel such as RON 95, diesel, and gas according to Deputy Finance Minister, Datuk Seri Ahmad Maslan back in May. These subsidies are enjoyed by all Malaysians including those on the higher income T20 group.

As such, there are plans to implement targeted fuel subsidies which could be presented during the tabling of Budget 2024 which is slated to be tabled in Parliament on 13 October.

Also read: Budget 2024: GST's return may be delayed but removal of fuel subsidy almost certain, more EV incentives likely