KUALA LUMPUR, March 17 -- The Ministry of Finance (MoF) has outlined the key variables that dictate domestic fuel prices following recent market volatility.

From Middle Eastern tensions to the economic impact of cross-border smuggling, several global and local factors determine the cost at the pump.

Fuel costs are primarily determined by the global market, which is governed by the laws of supply and demand, MoF said.

Geopolitical conflicts, particularly those currently occurring in the Middle East, frequently lead to disruptions in the world's oil supply.

When global supply falls while demand remains constant or increases, prices inevitably rise on a worldwide scale, directly impacting the domestic market.

The producer-importer dynam...