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Estimated Subsidy Expenditure (RM)
Comparison of estimated monthly fuel subsidy costs.
Primary Sources
'Don't rush fuel subsidy cuts': Experts say changes could hit Malaysian ...
May 12, 2026PETALING JAYA – Urging Putrajaya not to be hasty, experts and lawmakers warn that any changes to the fuel subsidy can have spillover effects across households of different income backgrounds.Commenting on the planned review of the Budi Madani initiative, particularly for higher-income earners, they cautioned the government against rushing to cut subsidies as the move would have wide implications.Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) treasurer-general Datuk Koong Lin Loong said the proposal to exclude the Top 20 (T20) income earners from the Budi Madani 95 initiative is not straightforward to implement.“It is not as simple as saying we can just cut all T20 from the initiative because Malaysia is very diverse.“We need to look at this from various perspectives,” he said.Citing an example, Koong said geographical differences must be taken into account, noting that a gross income of RM1,000 in Kelantan carries a very different value compared with the same amount in Kuala Lumpur.“The cost of living varies significantly between regions, so the same income level does not reflect the same standard of living,” he said, adding that disposable income should also be considered, rather than relying solely on gross income.“We cannot depend only on gross income without factoring in what is left after essential expenses.“Living costs in urban areas like Kuala Lumpur are much higher compared to Kelantan, Terengganu or Sabah, which means disposable income is lower even if gross income appears higher,” he said.Pasir Gudang MP Hassan Karim, however, said he fully supports the government’s move to exclude T20 income earners from the Budi Madani 95 initiative, saying it could help the government save up to RM1.5bil a month so there would be no need to cut subsidies for important sectors like health.It is “obscene” to continue a blanket subsidy approach for high-income earners, especially amid global economic pressures and the ongoing energy situation, he said.According to sources familiar with the matter, the government is also considering further adjustments to the Budi Madani 95 allocation, including a possible reduction of the subsidy quota to 150 litres for the T20 group.“However, the matter has yet to be finalised,” said a source.Federation of Malaysian Consumers Associations president Datuk Dr Marimuthu Nadason said instead of immediate cuts, the government should explore other cost-saving measures to sustain the initiative.“...
Malaysia weighs targeted fuel subsidy cuts for higher-income ... - CNA
KUALA LUMPUR: Malaysia may begin scaling back fuel subsidies for higher-income groups as early as next month, said its Economy Minister Akmal Nasrullah Mohd Nasir, as it grapples with rising costs driven by volatile global oil prices.The review comes as the government’s monthly subsidy bill surged to about RM6 billion (US$1.5 billion) as of April, prompting policymakers to consider shifting towards more targeted support.Malaysia expects the supply of fuel and other critical materials to remain uncertain for months, if not years – even if the ongoing conflicts in the Middle East are resolved, Akmal told CNA on Tuesday (May 5). Economy Minister Akmal Nasrullah Mohd Nasir said Malaysia expects the supply of fuel and other critical materials to remain uncertain for months, if not years – even if the ongoing conflicts in the Middle East are resolved. “It’s very volatile now. That's why the estimation will go up on a weekly basis,” he cautioned. He said the initial projections of about RM3 billion in subsidies per month when the Middle East crisis escalated in March have since risen significantly.The sharp increase has put pressure on public finances and raised questions over how long the government can continue shielding consumers from higher fuel prices. A Petronas fuel station is seen with the Petronas Twin Towers in the background in Kuala Lumpur, Malaysia. Picture taken February 10, 2016. REUTERS/Olivia Harris BALLOONING FUEL BILLMalaysia is now looking at spending up to RM6 billion monthly to keep the subsidies in place and avoid passing costs directly to households.For now, authorities have pledged that fuel supply will remain intact through next month. The federal government has maintained a RM1.99 per litre ceiling price for subsidised RON95 fuel for all Malaysians, regardless of income.Before the Middle East conflict broke out, the government initially planned to cut RON95 fuel subsidies for Malaysians in the top 15 per cent of the country’s income group.But last September, it said it accepted the “trade-off” of not maximising the savings, acknowledging that Malaysia faced cost-of-living pressures.State energy firm Petronas is now working to secure sufficient supply, said Akmal, noting that clearer plans for the months ahead are expected by mid-May.He signalled that the government intends to narrow subsidy coverage, allowing wealthier Malaysians to absorb higher fuel costs.“As we move along, I think we should even be more targeted to ensure the mas...
Malaysia Mulls Further Fuel Subsidy Cuts Even as Election Looms
Malaysia will continue with its fuel subsidy reform despite the possibility of a general election this year, according to Deputy Finance Minister Liew Chin Tong.
Malaysia's fuel subsidy headache leaves Anwar 'scrambling for solution ...
The government will review fuel subsidies for higher-income Malaysians but has yet to decide how the cut-off should be applied, Anwar says.
