KUALA LUMPUR – Economic analysis cautions that extended crude oil prices above USD 100 per barrel will require the Malaysian government to modify its oil-price projections ahead of the 2027 Budget. Economists predict that if crude benchmarks remain elevated due to West Asian geopolitical disruptions, national fuel subsidy expenditure will exceed RM40 billion in 2026, more than doubling the RM15 billion originally budgeted, posing significant challenges to the country’s 3.5% fiscal deficit target. As rising subsidy burdens raise expectations for more targeted fuel subsidy rationalisation across commercial sectors, industrial plant operators facing higher market-rate fuel surcharges have a strong commercial incentive to adopt localised thermal energy alternatives, such as Recycled Fuel Oil (RFO) and Re-Refined Base Oil (RRBO), to lock in predictable energy overhead and protect operating margins.
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(Source: The Star)
