Malaysia to Lower Fuel Prices Starting 1 July

Malaysia is lowering the price of one type of its fuel. From 1 July, the price of diesel will be RM2.10 per litre, or approximately Rp 9,150 (at an exchange rate of Rp4,359/RM). Currently, the applicable diesel price is RM2.15 per litre in the East Malaysian states of Sabah and Sarawak, and RM4.07 in Peninsular Malaysia. The price in Sabah and Sarawak is subsidised, while the Peninsula is not. This disparity has caused leakages, including the smuggling of subsidised diesel across state borders. Consequently, the government has issued a new regulation to close the gap. However, specific requirements will apply. Only eligible Malaysian citizens will be entitled to the new fully subsidised rate. They will be verified through their national identity card, and purchases will be limited to 200 litres per month. Deputy Finance Minister Amir Hamzah Azizan is expected to announce further details on Monday. Malaysia’s policy comes as a surprise amid projections of a soaring subsidy budget. The budget has increased more than fourfold to around RM3.2 billion per month, from RM700 million previously, as global oil prices rise amid the escalating war in Iran. Separately on Saturday, national energy company Petronas announced it had signed several new agreements in Turkmenistan, including collaborations with state-owned companies Turkmennebit and Hazarnebit. The company will strengthen Petronas’ presence in the Caspian Sea and expand its upstream portfolio. Meanwhile, Prime Minister Anwar Ibrahim said the deal would allow Malaysia to access one of the world’s largest gas reserves, potentially enabling the country to increase exports to partner nations such as China, Japan, and South Korea. Previously, Russia had also guaranteed Malaysia a long-term agreement for the supply of oil, gas, and diesel for at least 20 years, though Anwar did not provide further details.