Fuel prices across Malaysia could eventually be standardised if ongoing global geopolitical tensions continue to disrupt energy markets, a Sabah leader has warned, raising the prospect of changes to the country’s long-standing regional pricing system.
Sabah Economic Development Corporation (Sedco) chairman Datuk Masiung Banah said continued instability in global oil supply chains, particularly amid escalating tensions involving major powers, could place significant strain on Malaysia’s current subsidy framework.
“If the global economic crisis continues and the conflict between Iran and America/Israel intensifies, it would not be surprising if fuel prices in Sabah, Sarawak and the peninsula are standardised,” he was quoted as saying during a visit to Kampung Kuala Keramuak in Tongod.
Malaysia currently operates a targeted fuel subsidy system designed to stabilise retail prices despite fluctuations in the global crude oil market. Under the current structure, RON95 petrol is maintained at RM1.99 per litre nationwide, including in East Malaysia.
Without government subsidies, analysts estimate that RON95 could exceed RM4 per litre based on prevailing global market indicators, highlighting the scale of intervention required to keep prices stable for consumers.
Diesel pricing, however, varies by region and usage category. In Peninsular Malaysia, diesel prices are floated weekly and have recently exceeded RM6 per litre, while subsidised rates of around RM2.15 per litre are reserved for selected sectors such as logistics, public transport and agriculture.
In Sabah, Sarawak and Labuan, diesel remains fixed at RM2.15 per litre under a separate pricing arrangement.
Masiung said rising global oil prices would inevitably lead to higher costs for essential goods, particularly imported items, due to increased transportation and logistics expenses.
He also warned that Malaysia’s subsidy burden, estimated at around RM6 billion per month, is becoming increasingly difficult to sustain in the long term, especially under prolonged global market volatility.
“We must be prepared for rising living costs due to global economic uncertainty, as such conditions are unavoidable,” he was quoted as saying, while urging households to adopt more prudent spending habits.
He further suggested that subsidy structures in Sabah and Sarawak could be subject to review if fiscal pressures intensify, as policymakers weigh the long-term sustainability of the current system.
