Petroleum subsidies projected to reach RM40 billion in 2026

Petroleum subsidies in Malaysia are set to hit RM40 billion in 2026, following a global supply crisis that has driven world crude oil prices beyond US$120 per barrel. The rise in subsidies from January to April saw a monthly increase from RM800 million to nearly RM5 billion, with a subsequent moderation to about RM3 billion per month between June and August.

The government has adopted a balanced approach, prioritizing high-impact programs and essential services like education, healthcare, and public assistance over non-essential expenditures. This adjustment was made while ensuring that vital services remain protected, as reported by the Ministry of Finance (MOF). The government aims to bolster fiscal discipline by controlling operational expenditure, enhancing public spending efficiency, and curbing subsidies leakages.

Additionally, enforcement measures are being strengthened to ensure assistance and subsidies reach the eligible recipients, optimizing the use of national financial resources. The government remains committed to balancing public welfare from rising fuel prices with prudent expenditure management, ensuring that subsidy increases do not compromise the nation's fiscal sustainability.