Price Adjustments and Market Context
According to the MOF, the retail price for RON97 petrol will drop by 50 sen per litre to RM4.20. Unsubsidised RON95 petrol will fall by 40 sen to RM3.87 per litre, while unsubsidised diesel will decline by 25 sen to RM4.87 per litre. These reductions are effective for the period from November 12 to November 18, 2026.
The ministry attributed the price cuts to a decline in refined fuel prices in regional markets, supported by increased supplies of petrol and diesel stocks in Singapore, a key reference point for Malaysian petroleum pricing. This trend follows a series of adjustments in late 2025 and mid-2026. For instance, in late October, prices had already fallen by 10 to 30 sen per litre as regional markets moderated, even while Brent crude remained above US$100 per barrel. In early November, further reductions of 15 to 20 sen were recorded, signaling a sustained easing in refined product costs relative to crude benchmarks.
However, the MOF cautioned that global oil markets remain exposed to significant volatility. The ongoing conflict in Iran and recent attacks on tankers in the Strait of Hormuz highlight the risk of further supply disruptions. While refined product prices have eased, the ministry noted that medium-term global petroleum prices are expected to remain volatile due to these geopolitical uncertainties.
Subsidy Shield and Fiscal Impact
Despite the reduction in market prices, the government will maintain targeted fuel subsidies to cushion eligible households and businesses against cost-of-living pressures. Under the BUDI95 and BUDI Diesel schemes, eligible consumers identified via their MyKad (national identity card) will continue to pay fixed prices, with the government absorbing the difference between the subsidised rate and the unsubsidised APM price.
For the period of November 12–18, the details of the subsidy support are as follows:
- RON95 (BUDI95): Eligible consumers pay RM1.99 per litre. The government bears RM1.88 per litre, equivalent to 49% of the unsubsidised price of RM3.87.
- Diesel (BUDI Diesel): Eligible consumers pay RM2.10 per litre. The government bears RM2.77 per litre, equivalent to 57% of the unsubsidised price of RM4.87.
These targeted subsidies operate alongside the Subsidised Petrol Control System (SKPS) and Subsidised Diesel Control System (SKDS), which maintain prices at RM2.05 and RM2.15 per litre, respectively, for eligible users subject to monthly entitlement limits.
Budgetary Implications
The continued high level of subsidy expenditure underscores the fiscal priority placed on energy security and consumer protection. As announced in Budget 2027, the government expects to allocate approximately RM40 billion for fuel subsidies in the coming year. This substantial outlay is designed to support economic growth and safeguard livelihoods amid global energy uncertainty.
The subsidy intensity has fluctuated with market conditions. In late October, when unsubsidised RON95 was RM4.32, the government subsidy was RM2.33 per litre (54% of the market price). By November 12, as market prices fell, the per-litre subsidy cost decreased to RM1.88, although the percentage of the market price absorbed by the state also shifted to 49%. Similarly, the diesel subsidy cost per litre dropped from RM3.02 in early November to RM2.77, maintaining a coverage rate of 57%.
The MOF stated that the government will adopt a prudent approach to shield the public from price fluctuations while ensuring that the country’s fuel supply remains adequate and secure. The ministry also encouraged the public to adopt fuel-saving practices, such as better travel planning, to help conserve fuel usage and ease pressure on subsidy spending.
The next price review under the APM will be conducted for the subsequent weekly period, with the ministry monitoring regional refined product prices and global crude oil trends to determine the next adjustment.
