KUALA LUMPUR, — Malaysia’s position as an oil-producing nation is helping the government cushion the impact of rising global energy prices, according to Tengku Zafrul Aziz, chairman of the Malaysian Investment Development Authority (MIDA).
He said higher global oil prices may increase transportation and goods costs worldwide, but Malaysia has an advantage because it both produces and exports oil. This allows the country to generate additional revenue that can be used to protect citizens from the full impact of global energy price increases.
According to Zafrul, income from the oil and gas sector plays a key role in supporting government spending and public assistance programmes. In 2025, Malaysia produced around 184 million barrels of crude oil and condensate, strengthening the country’s ability to manage global price shocks.
The government also continues to implement targeted fuel subsidies, including the BUDI95 programme, which keeps the price of RON95 petrol at RM1.99 per litre for eligible citizens. The policy aims to ensure that subsidies reach those who need them most while reducing leakages in the system.
Zafrul added that when global oil prices surge, many countries must simply absorb higher costs because they rely heavily on imports. Malaysia, however, can use revenue generated from its energy sector to offset some of the economic pressure on households.
Dividends from the national oil company, Petroliam Nasional Berhad (Petronas), also contribute significantly to government finances. The company approved about RM32 billion in dividends for the 2025 financial year, with around RM20 billion expected for 2026, providing additional fiscal support during periods of volatile energy markets.
Despite the buffer provided by oil revenue, officials note that global conflicts and supply disruptions could still affect transportation costs, production expenses, and supply chains. Authorities say they will continue monitoring international developments closely to safeguard Malaysia’s economic stability.
