Malaysia’s fuel subsidy bill jumps to US$811 million amid Iran war

Mar 23, 2026· English· 南华早报

2026.03.23 01:50 A worker pumps fuel at a petrol station in Sarawak, Malaysia. Photo: AFP Malaysia’s fuel subsidy bill has surged more than fourfold in under a week due to the sharp spike in global oil prices triggered by the US-Israel war on Iran. The national monthly RON95 petrol and diesel subsidies have risen from 700 million ringgit to 3.2 billion ringgit (US$177.4 million to US$810.9 million), Prime Minister Anwar Ibrahim said on Sunday in an explainer video shared on social media. The disruption in the Strait of Hormuz, through which 20 per cent of the world’s oil supply passes, has tightened global supply. “Within less than a week, global oil prices surged from around US$70 to nearly US$120 per barrel,” Anwar said. A screengrab from the video Malaysian Prime Minister Anwar Ibrahim shared on social media showing Malaysia’s US$7 billion oil trade deficit. Photo: Facebook/anwaribrhimaofficial Despite being an oil-producing country, Malaysia remains dependent on imports, with nearly half of its supply coming through the affected route. In the post, Anwar said Malaysia exported crude oil worth about US$5.5 billion last year but imported almost US$12.6 billion, resulting in a deficit exceeding US$7 billion. “Malaysia does produce oil, but we also import more oil than we export,” he added. He said imported crude must be refined, transported and insured before reaching consumers, with all costs rising during conflict. The increase had ripple effects affect transportation costs, food prices and household spending nationwide, Anwar said. To shield consumers, the government has stepped up subsidies so that Malaysians do not bear the full brunt of global price increases. “In these challenging times, Malaysia has chosen to absorb part of the global cost pressures to protect the rakyat,” he said. Rakyat is the Malay word for ordinary citizens. Anwar also expressed confidence that the country would be able to weather the challenges ahead, noting that Malaysia had overcom

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