PUTRAJAYA will, for now, retain its fuel subsidy despite a spike in global prices following strikes on Saudi Arabian oil facilities over the weekend, said Lim Guan Eng.

“We will retain the current prices,” the finance minister said, dismissing speculation that local pump prices will increase.

Yesterday, Prime Minister Dr Mahathir Mohamad said the government will increase the subsidy to keep local prices down.

“In Malaysia, when oil prices go up, we give a subsidy. In the UK, if (global) oil prices go up, they increase the tax, and their people never complain.

“Oil prices in Malaysia are among the lowest in the world.”

Putrajaya earlier this year capped RON95 petrol and diesel at RM2.08 and RM2.18 per litre, respectively, in a bid to stabilise prices and reduce the people’s cost-of-living burden. No ceiling price was set for RON97.

On Saturday, coordinated strikes on key Saudi oil facilities resulted in a loss of about 50% of the kingdom’s output, or about 6% of global supply.

Dr Mahathir said any significant drop in Saudi oil production due to the attack will have an upward effect on global prices.

“If they (Saudi Arabia) have to cut production by, well, they say up to one million barrels, surely it will have an effect on oil prices worldwide.” – September 16, 2019.