Higher oil prices won’t disrupt 2027 development plans, says Akmal

Oil prices have been volatile due to geopolitical events in West Asia, according to economy minister Akmal Nasir. Despite this, Nasir assured that the 2027 development plans will remain unaffected, with national development expenditure expected to proceed as scheduled. The government will address the impact of rising oil prices on subsidies and fiscal position.

The ministry received a commitment for continued development funding next year, according to Bernama. Nasir acknowledged the urgency of oil price management but stressed the importance of keeping long-term commitments. The global energy market remains uncertain, with prices influenced by West Asian geopolitical developments.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid noted that Saudi Arabia increased its crude oil exports through the Strait of Hormuz to around 2.9 million barrels per day, up from about 700,000 barrels per day in August. This shift was due to the shutdown of the East-West pipeline.

In July, Prime Minister Anwar Ibrahim had anticipated nearly RM40 billion in fuel subsidies for 2026, more than double the initial RM15 billion allocation. Nasir also announced that the government would assess the progressive wage policy by the end of this year or early next year to evaluate its effectiveness in raising workers' wages.

The policy, currently in its implementation phase until the end of 2027, should consider improvements in productivity, training, and workers' skills, Nasir emphasized. He also highlighted that real wages have grown despite inflation, with a 3.3% increase to RM2,104 in the Malaysia Salary and Wages Survey Report 2025. Nasir concluded that wage levels should be assessed in conjunction with the cost of living, which varies by locality and household needs.