Insight
Malaysia Reference Price (MRP): A few years on, has it delivered and where is it headed?
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Report summary
Introduced in 2022, MRP replaced nearly three decades of subsidised gas pricing with an LNG export-linked mechanism, ending a regime that had spurred demand growth at the cost of a growing fiscal burden on PETRONAS. However, MRP carries structural limitations as a transitional tool. Critically, it applies only to the Peninsular Malaysia’s non-power sector as gas pricing to the power sector remains regulated, leaving the largest demand pool in Peninsular Malaysia outside the market framework. MRP is forecast to rise at annual average USD 9–11/mmbtu in 2026, driven by elevated Brent crude prices, before moderating to USD 7–9/mmbtu by 2029 - 2030, as a new wave of new global LNG supply capacity weighs on prices.
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