The Ministry of Finance (MOF) has revealed the massive fiscal strain placed on national coffers by global oil volatility, disclosing that Malaysia’s monthly fuel subsidy bill ballooned from RM700 million in January 2026 to a staggering peak of RM7.5 billion in April 2026.
The near 1,000% escalation was triggered by geopolitical conflict in the Middle East, which sent global benchmark Brent crude oil prices soaring to US$120 per barrel.
While the global oil market has cooled down over recent weeks, the government’s financial obligations remain heavily elevated. Global Brent crude has moderated to hover around US$90 per barrel, but the MOF projects that monthly fuel subsidies will still average a hefty RM3.5 billion per month under current market conditions.
The ministry provided a clear breakdown of where this monthly expenditure is being funneled to keep retail pump prices artificially low, with RON95 needing RM2 billion, while diesel at RM1.5 billion if oil is at US$90 per barrel.
Despite the recent price stabilisation, the ministry cautioned that international petroleum markets remain highly vulnerable to physical supply disruptions, fluctuating global inventory thresholds, and shifting seasonal demand across major economic regions.
The ministry reassured the public that Malaysia’s domestic petroleum inventory remains stable, robust, and fully capable of meeting immediate nationwide demand due to long-term supply contingency planning.
