KUALA LUMPUR: Malaysia's government on Wednesday set a ceiling for pump prices amid expectations crude oil prices will trend higher this year on rising global demand.

Under the new pricing mechanism, RON95 grade petrol will not exceed 2.05 ringgit ($0.5072) per litre, while the maximum price for diesel is set at 2.15 ringgit per litre, Finance Minister Tengku Zafrul Abdul Aziz said in a statement.

The minister did not say how much the decision could cost the government.

"The government is committed to reducing the people's cost of living and constantly monitors global crude oil prices and takes suitable measures to balance the government's subsidy expenditure with the need to preserve the people's welfare and wellbeing," Zafrul said.

The decision comes just months after the government in June removed an earlier ceiling for pump prices, as the coronavirus pandemic wreaked havoc on the global economy and severely curtailed movement and travel.

Oil rallied for a ninth straight day on Wednesday, its longest streak in two years on support from producer supply cuts and hopes that vaccine rollouts will drive a recovery in demand.